Commentary Magazine


Topic: oil sales

Oil Sales Boost Shows Obama’s Iran Shift

Administration officials have gotten a pasting this week as they’ve tried to convince Congress not to pass another round of even tougher sanctions on Iran. Try as they might to persuade both Democrats and Republicans to table efforts to squeeze the Islamist regime to give up their nuclear ambition, many members of both the Senate and the House don’t see the logic in a stand that sees any further pressure as weakening the chances of diplomatic success. So in an effort to bolster their dubious position, the administration announced today that it would expand the list of individuals and businesses targeted by the existing sanctions. The New York Times billed the measure as “new sanctions,” which is not true. What the government is doing is merely following existing laws that have not been zealously enforced.

The decision to crack down on companies that have helped facilitate Iran’s oil sales or collaborated on its nuclear and missile programs is welcome. But it is also a belated recognition that despite the bragging about the impact of sanctions that has been heard from both the State Department and the White House, economic restrictions on doing business with Iran have not been uniformly effective. The Times reported three years ago that over 10,000 exemptions had been granted by the Treasury Department to do business with Iran, a number that has certainly grown in the interim. And the Daily Beast reported recently that this year the same department had slowed down its work opening investigations of possible sanctions violators.

But the problem for the White House is not just a Congress that is dubious about a policy that seems aimed more at achieving some kind of détente with Iran than in shutting down its nuclear program. Yesterday, the International Energy Agency announced that Iran’s oil sales went up 10 percent in November as a result of a sense on the part of the world’s oil consumers and brokers that sanctions were easing. Though Obama’s point man on the sanctions, Undersecretary of the Treasury for Terrorism and Financial Intelligence David Cohen wrote yesterday in the Wall Street Journal that the U.S. is determined to hold down Iran’s oil sales, the news about the increase in November gives the lie to the notion that Washington’s efforts have been as determined as we’ve been led to believe.

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Administration officials have gotten a pasting this week as they’ve tried to convince Congress not to pass another round of even tougher sanctions on Iran. Try as they might to persuade both Democrats and Republicans to table efforts to squeeze the Islamist regime to give up their nuclear ambition, many members of both the Senate and the House don’t see the logic in a stand that sees any further pressure as weakening the chances of diplomatic success. So in an effort to bolster their dubious position, the administration announced today that it would expand the list of individuals and businesses targeted by the existing sanctions. The New York Times billed the measure as “new sanctions,” which is not true. What the government is doing is merely following existing laws that have not been zealously enforced.

The decision to crack down on companies that have helped facilitate Iran’s oil sales or collaborated on its nuclear and missile programs is welcome. But it is also a belated recognition that despite the bragging about the impact of sanctions that has been heard from both the State Department and the White House, economic restrictions on doing business with Iran have not been uniformly effective. The Times reported three years ago that over 10,000 exemptions had been granted by the Treasury Department to do business with Iran, a number that has certainly grown in the interim. And the Daily Beast reported recently that this year the same department had slowed down its work opening investigations of possible sanctions violators.

But the problem for the White House is not just a Congress that is dubious about a policy that seems aimed more at achieving some kind of détente with Iran than in shutting down its nuclear program. Yesterday, the International Energy Agency announced that Iran’s oil sales went up 10 percent in November as a result of a sense on the part of the world’s oil consumers and brokers that sanctions were easing. Though Obama’s point man on the sanctions, Undersecretary of the Treasury for Terrorism and Financial Intelligence David Cohen wrote yesterday in the Wall Street Journal that the U.S. is determined to hold down Iran’s oil sales, the news about the increase in November gives the lie to the notion that Washington’s efforts have been as determined as we’ve been led to believe.

This impression was reinforced by President Obama’s comments at the Saban Forum last weekend when he defended a policy of granting sanctions relief as being aimed at creating a political constituency inside Iran for nuclear concessions. It’s hard to know just how seriously to take such pronouncements. Does the president really believe that the Islamist regime cares about public opinion given its complete indifference to it on every issue, especially regarding the suppression of dissent? Moreover, given the fact that he has already discarded the considerable economic and political leverage he holds over the ayatollahs in exchange for virtually nothing, it’s difficult to believe holding off on more sanctions will make them more rather than less amenable to giving up their nuclear dreams.

Even more to the point, the statements from Obama and Kerry that demonstrate how afraid they are of Iranian displeasure and the desire to appease their anger about sanctions make the promise of tougher enforcement in the future even less credible. Kerry told the Senate on Tuesday that he didn’t think companies would plan to do business with Iran given the possibility of the U.S. imposing tougher sanctions in the future. But what the November oil statistics and the administration’s full-court press against tougher sanctions demonstrate is that it is unlikely that anyone in Iran, Asia, Europe, or the United States believes for a moment that Obama and Kerry will do just that. The first weakening of the sanctions was the signal Iran’s oil customers were waiting for and the coming months will likely see even more economic activity with Iran conducted on the premise that once the regulations start to unravel, they will never be re-imposed. If Congress is serious about stopping Iran, that’s something they need to consider when listening to administration pleas for inaction on more sanctions legislation.

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Could We Have Done Worse?

In the never-ending quest to do not much of anything to prevent Iran from acquiring nuclear weapons, the Obami, we are told, are “walking a delicate diplomatic path.” On one hand, they are being played, and know it. (“They acknowledge Iranian President Mahmoud Ahmadinejad appears to be using negotiations to limit U.N. pressure while also working to legitimize his government domestically.”) But then again, they don’t want to upset the — you knew this was coming — “moderate opposition forces inside Iran.” So they stall. Yes, yes, they’ve been stalling for some time now, pretending that the regime would show interest in a grand bargain, downplaying Qom, cooking up the flimsiest of enrichment deals to provide cover for doing not much of anything, protracting the process of being rejected, ignoring news of other possible secret sites (that would fall under the “known unknowns,” in Donald Rumsfeld parlance), and refusing to concede that we’ve gotten nowhere. It’s a lot of work doing nothing for that long.

So what’s next? They’ll get cracking on this next year. Yeah, honestly:

The officials said Mr. Obama remains committed to ratcheting up pressure early next year, and that Washington is cobbling together a coalition of allies to punish Tehran even if Beijing and Moscow balk. The U.S. has also been talking with Saudi Arabia and the United Arab Emirates about how to utilize oil sales to pressure Tehran. “Our patience is limited. The president has made clear that at the end of the year we’ll be able to decide” if Iran is serious, said Robert Einhorn, the State Department’s top official on nonproliferation, last week. “April 2010 is too late.”

April 2010 is too late, but November 2009 is too early. And it seems we are already banking on the noncooperation of Moscow, whose cooperation was the rationale for doing nothing this year. (I suppose we were chumps after all for giving up the missile-defense facilities in Poland and the Czech Republic.)

The result: we will have given Iran yet another year free of outside pressure, enabling it to proceed with its nuclear program. And along the way, we’ve helped bolster the mullahs and defund the democratic opposition. If we had tried to help the regime achieve its aims, we would have been hard pressed to do “better.” And if we were supposed to be defanging the threat of a nuclear-armed fundamentalist Islamic state and staving off a nuclear-arms race in the Middle East, we could hardly have done worse. But maybe next year will be better. Or whenever.

In the never-ending quest to do not much of anything to prevent Iran from acquiring nuclear weapons, the Obami, we are told, are “walking a delicate diplomatic path.” On one hand, they are being played, and know it. (“They acknowledge Iranian President Mahmoud Ahmadinejad appears to be using negotiations to limit U.N. pressure while also working to legitimize his government domestically.”) But then again, they don’t want to upset the — you knew this was coming — “moderate opposition forces inside Iran.” So they stall. Yes, yes, they’ve been stalling for some time now, pretending that the regime would show interest in a grand bargain, downplaying Qom, cooking up the flimsiest of enrichment deals to provide cover for doing not much of anything, protracting the process of being rejected, ignoring news of other possible secret sites (that would fall under the “known unknowns,” in Donald Rumsfeld parlance), and refusing to concede that we’ve gotten nowhere. It’s a lot of work doing nothing for that long.

So what’s next? They’ll get cracking on this next year. Yeah, honestly:

The officials said Mr. Obama remains committed to ratcheting up pressure early next year, and that Washington is cobbling together a coalition of allies to punish Tehran even if Beijing and Moscow balk. The U.S. has also been talking with Saudi Arabia and the United Arab Emirates about how to utilize oil sales to pressure Tehran. “Our patience is limited. The president has made clear that at the end of the year we’ll be able to decide” if Iran is serious, said Robert Einhorn, the State Department’s top official on nonproliferation, last week. “April 2010 is too late.”

April 2010 is too late, but November 2009 is too early. And it seems we are already banking on the noncooperation of Moscow, whose cooperation was the rationale for doing nothing this year. (I suppose we were chumps after all for giving up the missile-defense facilities in Poland and the Czech Republic.)

The result: we will have given Iran yet another year free of outside pressure, enabling it to proceed with its nuclear program. And along the way, we’ve helped bolster the mullahs and defund the democratic opposition. If we had tried to help the regime achieve its aims, we would have been hard pressed to do “better.” And if we were supposed to be defanging the threat of a nuclear-armed fundamentalist Islamic state and staving off a nuclear-arms race in the Middle East, we could hardly have done worse. But maybe next year will be better. Or whenever.

Read Less




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