Last week’s Iranian drone and missile attacks on Israel have prompted the European Union to prepare to impose fresh sanctions on Iranian airlines and military companies—but not oil. The decision was made at a meeting of EU leaders in Brussels Wednesday, with Eurocrats slowly ratcheting up pressure on Tehran for its assault on Israel in retaliation for an alleged IDF attack on Iran’s Damascus consulate.
Divisions within the bloc, however, surfaced when it came to the question of sanctioning oil.
According to media sources, Germany and Austria are understood to be supportive of oil sanctions and denouncing the Iranian Revolutionary Guard as a terror organisation. Other member states advocate what they see as a more pragmatic stance.
A growing market in China has prompted an Iranian oil export boom in recent months—as outlined by the Financial Times—in a geopolitical shift that severely limits the ability of both the U.S. and EU to apply pressure on the Islamic Republic.
“The Iranians have mastered the art of sanctions circumvention,” declared Fernando Ferreira, from the Rapidan Energy Group, continuing: “If the Biden administration is really going to have an impact, it has to shift the focus to China.” U.S. Treasury Secretary Janet Yellen has also expressed the belief that Tehran is getting better and better at evading sanctions in an increasingly divided world. Even the Biden administration has mixed feelings about the impact any further sanctions would have on the Iranian regime.
Sanctions expert Kimberly Donovan told Reuters it is unlikely the Biden administration will tighten sanctions, as it would raise gas prices in the U.S.: “The price of oil and ultimately the prices of gas at the pump become critical during an election year.”
This new market for Iranian oil has contributed to a sense of futility within the EU circles about the value of new sanctions towards Iranian energy imports, insiders speaking to the FT alleged. Typically, the more general European backsliding on support for Israel is strengthened by this position.
Iran was already under scrutiny from Brussels due to its reported human rights abuses, the arrest of EU officials, and for supplying drone technology to Russia. Last year saw the elite Iranian Revolutionary Guard placed under specific sanctions in what Tehran called a breach of international law.
Iran’s flagship airline IranAir could be the major target of this new round of sanctions, which also includes further restrictions on military manufacturing companies.
Iran is a longtime foe of American foreign policy in the region as well as backer of Islamic militias such as Hezbollah in Lebanon, the Houthi movement in Yemen, and even the militant Sunni Hamas terror group in Gaza.
