UPDATE:US Lawmakers Seek To Sanction Iran's Gasoline Suppliers
April 28 2009 - 5:28PM
Dow Jones News
U.S. President Barack Obama would have new authority to sanction
foreign firms that sell gasoline and other oil products to Iran
under legislation introduced Tuesday by a bipartisan group of 25
U.S. senators seeking to halt Iran's push to develop nuclear
weaponry.
If the bill becomes law, the U.S. president would have clear
authority to impose economic sanctions on foreign firms that sell,
ship or insure gasoline or other refined oil products to Iran.
Foreign subsidiaries of U.S. firms also would be covered by the
proposed legislation.
Oil-rich Iran imports 40% of its gasoline so "this is the best
leverage we have," Sen. Evan Bayh, D-Ind., said at a press
conference to unveil the Iran Refined Petroleum Sanctions Act.
Iran is believed to be two to four years away from becoming a
nuclear-armed power, and U.S. lawmakers hope the prospect of
punishing sanctions on gasoline importers will convince Iran's
government to abandon its nuclear ambitions.
The U.S. already has the ability to sanction firms doing
business with Iran, but the president's authority would be stronger
and more precise under the proposed bill, said Sen. Jon Kyl,
R-Ariz.
Kyl said the bill gives firms that provide gasoline or other oil
products to Iran a clear choice - do business with the $13 trillion
U.S. economy, or with Iran's $250 billion economy, but not
both.
Sen. Joseph Lieberman, I-Conn., said the bill would clarify
"ambiguous" U.S. presidential authority to sanction firms that
supply Iran with gasoline, giving the president "a powerful new
tool to use" in negotiations with Iran.
The Senate bill is expected to be considered by the Senate
Banking Committee before being brought to the full Senate. The
committee's chairman, Sen. Christopher Dodd, D-Conn., is not a
co-sponsor of the bill but Lieberman said Dodd is generally
supportive of it.
Similar legislation was introduced in the U.S. House of
Representatives last week. The bill, the Iran Diplomatic
Enhancement Act, is co-sponsored by Reps. Mark Kirk, R-Ill., and
Brad Sherman, D-Calif.
European firms would be hardest-hit by the proposed sanctions.
U.S. lawmakers say a half-dozen firms - British Petroleum, France's
Total (TOT), Swiss/Dutch-based Trafigura, and Swiss-based firms
Glencore and Total, and India's Vitol - supply most of Iran's
gasoline. Most of the tankers used to ship the gasoline are insured
by Lloyd's of London.
In a telephone interview Tuesday, Rep. Kirk said he's been told
to expect hearings on the House bill this summer, paving the way
for a House vote this fall. He'd prefer swifter action, citing
"credible reports" that Iran is already stockpiling gasoline in
rented oil tankers.
Kirk expects sanctions would initially trigger anti-U.S. riots
by Iranians, but longer-term, he thinks the measure would dry up
Iran's gasoline supply, causing its economy to crater and
unemployment to spike. Within a year, he predicts sanctions will
prove to be "completely effective" in bringing Iran's government to
the bargaining table, spurred by Iranians who say: "we can't eat
nuclear weapons."
- By Judith Burns, Dow Jones Newswires, (202) 862-6692;
Judith.burns@dowjones.com