You'd think the Biden administration would have realized by now that enriching the Iranian regime is a dangerous mistake. You'd be wrong. Relaxed U.S. enforcement of oil sanctions continued through October, refilling Supreme Leader Ali Khamenei's coffers even after the Oct. 7 slaughter and the more than 40 attacks on U.S. troops by Iran's proxies in the weeks since.
Iran exported nearly 1.4 million barrels of oil per day in October, sustaining its average for 2023. This is up 80% from the 775,000 barrels per day Iran averaged under the Trump administration's "maximum pressure" strategy, according to United Against Nuclear Iran, the group of former U.S. Ambassador Mark Wallace and Sen. Joe Lieberman, whose Tanker Tracker generates the best public data we have.
The Iranian surge in oil exports since President Biden took over has brought Iran an additional $32 billion to $35 billion, according to the Foundation for Defense of Democracies. The calculations are tricky, but the cause of the Iranian windfall is clear: As part of Biden's quiet diplomacy with Iran, the U.S. has curtailed sanctions enforcement. Customers and middlemen have concluded the risk is low and the discount on Iran's oil is too good to pass up.
This transfer of funds to Iran is cumulatively more significant than the president's recent $6 billion ransom payment in return for five hostages. And it keeps growing, even as the money fails to moderate Iranian behavior. Instead it finances Iran's aggression abroad via proxies such as Hamas in Gaza, Hezbollah in Lebanon, the Houthis in Yemen and the front groups in Iraq and Syria that shoot at American bases almost daily.
In 2020 the State Department assessed that Iran sends $100 million a year to Palestinian terrorist groups, arming and training them to attack Israel and murder its civilians as Hamas did Oct. 7. Last year Hamas leader Ismail Haniyeh said that his group receives $70 million from Iran, plus long-range rockets.
Citing an Israeli security source, Reuters reports that Iran's funding for Hamas ballooned in the past year to $350 million. Hamas's new capabilities took Israel and the U.S. by surprise, but they didn't come from nowhere.
About 70% of Iran's oil exports are to China, which helps explain the blossoming Russia-China-Iran axis challenging world order. Iran sends China cheap oil and Russia new military drones. It may export missiles too, now that the Biden Administration allowed international missile sanctions to lapse.
In return, Iran receives the money and diplomatic cover it needs to advance its war on the U.S. and Israel. Russian military support in Syria shields Iranian arms transfers, and the potential for nuclear cooperation should keep Western policy makers up at night.
If the Biden administration wants to limit the flow of oil money to Tehran, it knows what to do: Enforce the law and sanction the complicit banks, purchasers, insurers, tankers, ports and other players that facilitate the trade. Does the president have the will to break from his strategy of appeasement?