Iran’s national oil company and its oil-tanker fleet are the focus of sanctions measures that two U.S. lawmakers intend to submit to Congress aimed at blocking Iran’s ability to sell its crude internationally.
Representative Howard Berman, a California Democrat, and Senator Bob Menendez, a New Jersey Democrat, plan to file similar proposals today to compel the U.S. Treasury Department to investigate whether the National Iranian Oil Co. and the National Iranian Tanker Co. are owned or controlled by the Iranian Revolutionary Guard Corps, according to congressional aides.
Such a determination by the Treasury would permit the U.S. to impose sanctions on foreign financial institutions that facilitate transactions for NIOC or NITC anywhere in the world, by shutting down or imposing strict conditions on the foreign institutions’ U.S. bank accounts, according to the aides who spoke on condition of anonymity since the legislation hasn’t been filed.
The proposed designation of Iran’s oil and tanker companies would add to an array of new penalties imposed on Iran by the U.S. and the European Union over the past three months.
The Revolutionary Guard Corps, an elite military unit that the U.S. Treasury says has taken significant control of important sectors of the Iranian economy, has been the target of numerous international sanctions imposed by the U.S., the United Nations and others for involvement in illicit nuclear and missile activities and sponsorship of terrorism.
Cutting Iran’s Revenue
Menendez and Berman have been strong proponents of sanctions to deprive Iran’s government of revenue needed to finance any illicit nuclear activities and to force its leaders to return to nuclear negotiations.
Berman, the senior minority member of the House Foreign Affairs Committee, plans to submit his measure to target NIOC and NITC as a bill, an aide said.
Menendez will introduce his proposal as an amendment to an Iran sanctions bill circulated yesterday by Senate Banking Committee Chairman Tim Johnson, a South Dakota Democrat, and senior Republican Richard Shelby of Alabama. Their bill would require any companies traded on U.S. stock exchanges to reveal Iran-related business to the Securities and Exchange Commission.
Menendez, a member of the Senate Banking Committee and the Foreign Relations Committee, was the chief sponsor, along with Senator Mark Kirk, an Illinois Republican, of sanctions on the Central Bank of Iran intended to complicate the purchase of oil from Iran. The central bank sanctions passed Congress overwhelmingly and were signed into law by President Barack Obama on Dec. 31.
The Johnson-Shelby draft legislation also would extend U.S. sanctions to firms involved in joint ventures with Iran anywhere in the world involving uranium mining or new energy projects. It would penalize U.S. parent firms for certain Iran-related activities of their foreign subsidiaries, expand sanctions on Iran’s energy and petrochemical sectors and mandate sanctions on those who supply Iran with weapons and other technology used to commit human rights abuses.
Oil is Iran’s main source of income, supplying more than 50 percent of the national budget, according to International Monetary Fund figures. Oil provided the Persian Gulf nation $56 billion in the first seven months of 2011, according to the U.S. Energy Department.
Oil for March delivery declined 30 cents, or 0.3 percent, to $98.48 a barrel on the New York Mercantile Exchange today, the lowest settlement since Jan. 20.
Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, pumped about 3.545 million barrels of oil a day in November, a Bloomberg survey showed, and exported an average 2.58 million barrels a day in 2010, according to OPEC statistics.
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