The evasions of US sanctions by Iran and its allies – largely thanks to the Biden administrations' sanctions waivers -- mark a new chapter in America's history. Never before have sanctions been so ostentatiously disregarded without any seeming awareness by those violating them of the possible consequences.
Flouting international agreements not only undermines the integrity of the sanctions themselves but has also been demolishing the authority and credibility of the US administration. The problem is that such ostentatious flouting of sanctions has been producing a global lack of respect for the United States. Such derision has been transforming the once formidable reputation of the US into little more than a punchline, and, in the eyes of allies and adversaries alike, reducing America's stature to that of an attractive target.
Despite the sanctions, Iranian oil exports have continued to surge, funding Iran's October 7 war on Israel -- in addition to more than 150 attacks on US troops in the Middle East by Iran's militias and proxies. The US administration, it appears, has actually been funding Iran to attack Israel and itself.
In addition, Iran continues sending weapons to Russia, to help it crush Ukraine
March 2024 witnessed a notable spike in Iranian oil exports, that reached a staggering 1.82 million barrels per day, a figure not seen since October 2018, just prior to the Trump administration's decision to reinstate oil sanctions. This upward trajectory in export volumes represents a direct defiance of the sanctions regime. The sustained growth in exports carries profound implications for Tehran's fiscal landscape, as oil revenues traditionally constitute a substantial portion of Iran's total income, comprising nearly 80% of the nation's revenue stream.
During the tenure of President Donald Trump, the United States adopted a markedly stringent approach towards Iran, aiming to exert maximum pressure and curtail its economic activities, particularly in the realm of oil exports. The impact of this approach was evident in the decline of Iran's oil exports, plummeting to a mere fraction of their previous levels.
Under the weight of stringent sanctions and diplomatic pressure, Iran's oil exports dwindled to approximately 200,000 barrels per day, marking a decline of more than 90% from previous levels. This reduction in export volumes not only highlighted the severity of the measures imposed by the Trump administration but also reflected how effective the strategy was in disrupting Iran's economic lifelines and constraining its ability to generate vital revenue streams. The drop in oil exports served as a cornerstone of the previous US administration's broader strategy to isolate and weaken the Iranian regime, and signaled a departure from appeasement.
When the sanctions were rigorously enforced, the impact reverberated beyond Iran's borders by significantly disrupting the flow of funds to the Iranian regime and hampering its ability to support various proxies and agendas throughout the region. The reduction in Iran's oil revenues dealt a severe blow to the regime's financial capabilities, curbing its capacity to fund entities such as Bashar Assad's regime in Syria, and terrorist organizations such as Hamas, Hezbollah and the Houthis.
An example of this financial strain surfaced through reports in Syrian-state-controlled media, indicating a reduction in Tehran's financial assistance to Damascus. Publications like Al-Watan highlighted Iran's decision to halt its credit line to the Syrian government, and the hobbling of its ability to ship oil to Syria, which subsequently causing fuel shortages there. These tangible consequences underscored the direct impact of sanctions on Iran's ability to extend its influence and support networks beyond its borders.
In addition, the stringent enforcement of sanctions and the Trump administration's uncompromising stance towards Iran also had an effect on Hezbollah, Iran's proxy in Lebanon. As a key ally and beneficiary of Iranian support, Hezbollah found itself under increasing financial strain as, due to the sanctions, the flow of funds from Tehran dwindled. A senior Hezbollah official, speaking anonymously to the Washington Post in 2019, candidly acknowledged the adverse impact of US sanctions on the group's financial operations. He admitted that the regime was forced to make significant cuts in expenses.
The admission exposed the tangible consequences faced by Hezbollah as a result of the economic pressure on Iran, its primary patron. Hezbollah leader Hassan Nasrallah also publicly addressed the financial challenges posed by the sanctions. He urged Hezbollah's fundraising arm to redouble its efforts to solicit financial support to sustain its military activities and further its jihadist agenda. This acknowledgment from within Hezbollah's ranks testified to the effectiveness of sanctions in curbing the ability of terrorist organizations to sow violence and destabilize the region.
By contrast, the Biden administration has provided a lifeline to the Iranian regime by providing it with much-needed financial relief to export more oil and terror.
Dr. Majid Rafizadeh is a business strategist and advisor, Harvard-educated scholar, political scientist, board member of Harvard International Review, and president of the International American Council on the Middle East. He has authored several books on Islam and US Foreign Policy. He can be reached at Dr.Rafizadeh@Post.Harvard.Edu
