Iranian petroleum sales are booming despite international sanctions, thanks in large part to China, which has been buying record amounts of Iranian petroleum products in the last few years. The US House of Representatives is now hoping to cure China of its penchant for Iranian oil through secondary sanctions in new legislation.
A report by The Washington Institute found that Iranian oil exports have increased more than threefold since 2020. From exporting fewer than 500,000 barrels per day after sanctions were imposed in 2018-2019, Iran was exporting an estimated 1.5 million barrels per day in September 2023.
“China is the greatest purchaser of Iranian petroleum. It is totally insane,” Representative Mike Lawler (R-New York) said in a briefing hosted by the US Israel Education Association.
China purchases 91% of Iran’s oil exports, for a steep discount, while Syria buys 7% and Venezuela 2%.
Iran uses the money to fund terrorism
Lawmakers say that Iran uses the oil money to fund terrorism through proxies such as Hamas in the Palestinian territories, Hezbollah in Lebanon, and the Houthis in Yemen. All three of those groups have been launching rockets at Israel.
Lawler is a member of the Financial Services and Foreign Affairs Committee and is in 50 congressional caucuses, including the Abraham Accords Caucus, Friends of Egypt Caucus, and House Republican Israel Caucus.
Together with Representative Jared Moskowitz (D-Florida), he sponsored the Stop Harboring Iranian Petroleum (SHIP) Act of 2023 to stop Iran from funding terrorist operations via petroleum sales. The bill was co-sponsored by 154 Republicans and 87 Democrats in the House of Representatives.
We have made it very clear in putting this bill forward that no one should be evading sanctions here, that Iranian petroleum should not be purchased, and that anyone who does indeed purchase it is going to be held accountableThe SHIP Act summary says it would require the US president “to impose visa- and property-blocking sanctions against foreign persons that knowingly transport, process, refine, or otherwise deal in petroleum and petroleum products (including petrochemicals) originating in Iran.”
“We have made it very clear in putting this bill forward that no one should be evading sanctions here, that Iranian petroleum should not be purchased, and that anyone who does indeed purchase it is going to be held accountable,” Lawler said.
Passed by popular vote
The bill passed in the House of Representatives on Nov. 3 by a vote of 342-69. Only one Republican voted against it, Thomas Massie (R-Kentucky). It is now awaiting a vote in the Senate.
“In my personal opinion, besides the aid package, the most important act to pass through Congress since October 7th is the SHIP Act,” Heather Johnston, CEO and executive director of the USIEA, said at the briefing.
Representative Betty McCollum (D-Minnesota), who voted against the legislation, said she did so “because the bill contains overly broad language that would have serious impacts on the global economy and the US economy as well.” Although she agreed that sanctions are a powerful tool, she does not believe the bill offers the executive branch enough flexibility to adjust the sanctions as needed.
McCollum serves on the House Appropriations Committee and is the ranking member of the Defense Subcommittee. She belongs to a number of caucuses, including the US-Lebanon Friendship Congressional Caucus, Congressional Armenian Caucus, and the Congressional UXO/Demining Caucus. On Nov. 15, McCollum sent a letter to President Joe Biden calling for a ceasefire in the Gaza Strip. The letter was signed by several groups, including Jewish Voice for Peace Action, National Iranian American Council Action, Yemeni Alliance Committee, and the Center for Jewish Nonviolence.
“This is where Senator [Chuck] Schumer, the Senate majority leader from New York, the highest-ranking Jewish official in America, should be pushing for this to pass immediately. Frankly, I do not know why he hasn’t brought it to the floor,” Lawler told the briefing.
Senators Maggie Hassan (D-New Hampshire) and Marco Rubio (R-Florida) sponsored the bill in the Senate. Rubio applauded the passage of the act by the House of Representatives and said it was imperative to “enact and then rigorously enforce this bill” to keep sanctioned Iranian oil from funding terrorism.
“The intent of the SHIP Act was to put in place secondary sanctions on anyone who knowingly transports or refines Iranian petroleum,” Lawler said.
He said that a companion bill to the SHIP Act he introduced had cleared the Financial Services Committee. The companion bill is aimed at imposing secondary sanctions on Chinese financial institutions that facilitate Iranian petroleum sales.
While the SHIP Act was in the works months before the Oct. 7 terrorist attacks on Israel, after the attacks Lawler and a bipartisan group of US House members pushed even harder for it. Seeing the horrors of those attacks in footage filmed by the Hamas terrorists themselves created an even greater sense of urgency for the representatives.
“Frankly, it is a video everyone should see, so that they fully understand the barbaric behavior, the vile, the disgusting conduct of Hamas and what they did on October 7th. Brutalizing, murdering, slaughtering women, children, babies,” Lawler said. “We watched 138 lives snuffed out in that video, and it was horrific. And I think if people truly understood what occurred on that day, they wouldn’t be calling for a ceasefire.”