How Big Oil Defies The Great SatanAmy Borrus
PURCHASES OF IRANIAN OIL by U.S. companies are becoming a political sore point. Reason: They undercut the Clinton Administration's current campaign to get Europe and Japan to curb trade and financial aid to Tehran.
The U.S. has banned imports of Iranian crude oil since 1987 when the Iranians attacked U.S.-flagged tankers in the Persian Gulf. But there's a loophole. U.S. oil giants can buy and sell Iranian crude through overseas subsidiaries. Oil industry analysts say these subs take 20% to 30% of the 2.5 million barrels daily that Iran exports, enriching Tehran's coffers by up to $4 billion yearly. Exxon is Iran's single biggest customer. A company official confirms that Exxon buys 250,000 to 300,000 barrels per day from Iran for refineries in Europe and Asia.
This alarms the People's Mojahedin of Iran, the foremost resistance group to the Tehran regime. It says the sales effectively subsidize terrorism and repression.
Efforts are afoot to tighten the embargo. Senator Alfonse D'Amato (R-N.Y.) has just introduced a bill that would bar U.S. companies from overseas purchases of Iranian oil.
That's not likely to work, as the oil producers point out. Surging world demand for oil means that, with a tighter embargo, Iran will simply sell more to other customers. So Tehran's treasury wouldn't be dented, but the Saudi and Kuwaiti oil that U.S. buyers would have to shift to would be more costly. And Europeans would howl at any U.S. attempt to extend its jurisdiction abroad.
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