Bipartisan efforts are underway in the U.S. Senate to introduce legislation aimed at strengthening the enforcement of oil sanctions on Iran. Senator Joni Ernst, a Republican, is leading the charge for this bill, set to be unveiled on Monday. The proposed legislation seeks to establish a $150 million Iranian sanctions enforcement fund specifically designated for the Department of Homeland Security Investigation (HSI) office, with a primary focus on Iranian petroleum sanctions. Senator Richard Blumenthal, a Democrat, will co-lead the bill.
The HSI office has been actively involved in investigations leading to the seizure of two Iranian oil cargoes since its enforcement program's initiation in 2019. These actions often involve substantial upfront costs, which have not always been readily available.
Recent events, including the October 7 attacks on Israel by Hamas, which resulted in significant casualties, have spurred U.S. lawmakers to consider various legislative measures to exert pressure on Iran. While Hamas has historical ties to Iran, Tehran has denied any involvement in the attacks.
In April, the U.S. Department of Justice seized a cargo carried by the Suez Rajan tanker, which was attempting to transport nearly 1 million barrels of Iranian oil to China in violation of U.S. sanctions.
Senator Ernst expressed her motivation for the proposed legislation, saying, "Right now, we are witnessing the chaos Iran-backed Hamas is inflicting on Israel and the world, funded by the IRGC’s illicit oil sales. Instead of allowing Iran’s illegal actions to continue, I’m working to cut the red tape and equip HSI, and its proven record of enforcing sanctions, with the support and resources it needs to go after and stop Tehran."
Despite U.S. sanctions related to its nuclear program, Iran has seen an increase in its oil exports this year. Ernst and Blumenthal have urged the Biden administration to empower the Homeland investigative office to assist in the seizure of shipments. Iran maintains that its nuclear program is intended for peaceful purposes.
Iran holds significant influence over oil shipping, with approximately one-fifth of the world's seaborne petroleum passing through the strategically vital Strait of Hormuz, situated between Iran and Oman.
In May, Iran seized two oil tankers in the Gulf, part of a series of seizures and attacks on commercial vessels dating back to 2019. Under current law, 75% of the funds obtained from U.S. oil seizures go to the U.S. Victims of State Sponsored Terror Fund. The proposed legislation allocates the remaining 25% to the enforcement fund, which would have a maximum cap of $500 million, with any additional funds contributing to national debt reduction.
Senator Blumenthal emphasized that this proposed measure "will establish dedicated resources to go after illicit Iranian oil," weaken Tehran's influence, and provide support to the Victims of State Sponsored Terrorism Fund.