Strategic Oil Release May Breach Iranian Sanctions
Alaskan senator Lisa Murkowski says the US may have breached Iran sanctions as part of its 30 million barrel strategic oil release. (image: politicsdaily.com)
An Alaskan senator says the US may have violated the Iran Sanctions Act during its sales of 30 million barrels of reserve oil stocks this month, fuelfix.com has reported.
The US off-loaded the oil as part of the International Energy Agency’s 60-million-barrel draw-down of member states’ strategic oil reserves. The move aimed to restore stability to oil markets and help reduce prices by compensating for the loss of Libya’s 1.6 million daily barrels of crude production.
However Sen. Lisa Murkowski says the US may have violated sanctions against pariah state Iran as part of the sale.
At the root of the alleged violation is the Department of Energy’s decision to sell four million barrels of oil to the Dutch-Swiss energy trading company Vitol for $430 million.
Several recent reports in energy publication have linked Vitol to business dealings with Iran, including claims the company had signed a confidentially agreement with the Iranian government. Even before the reports, Vitol was Iran’s key petroleum fuel supplier until only last year, fuelfix.com reported.
But under the US Iran sanctions, American companies are generally barred from exporting US goods and services to the country or from involvement in petroleum development in Iran.
Murkowski said the potential deals cast new shadows over the US sale of strategic petroleum reserve oil and raised fresh questions about whether Vitol was eligible to bid on the crude, given its “well-known ties to a country that has repeatedly called for the destruction of the United States and its allies.”
“If Vitol is doing business with Iran — directly or indirectly — the administration needs to revisit whether Vitol was an appropriate and lawful purchaser of SPR oil,” said Murkowski, the top Republican on the Senate Energy and Natural Resources Committee.
Murkowski planned to write to US President Barack Obama asking for an explanation around Vitol’s eligibility and how the sale did not violate the Iran Sanctions Act.
An Energy Department spokesman said Vitol’s eligibility was vetted before the company’s bid on the reserve oil was accepted.
“Prior to the completion of the purchasing agreement, we reviewed the deal to confirm that Vitol is not engaged in activities that would result in sanctions, including under the Iran Sanctions Act,” said spokesman Damien LaVera.
Though world oil prices initially plunged when the IEA announced the release, prices have since rebounded. The organization considered a second release but decided against it last week, saying world oil markets were adequately supplied thanks to OPEC boosting production.
It is worth noting that Iran led opposition to OPEC increasing production targets at the oil-producing cartel’s Vienna meeting last month, though Saudi Arabia promised to pump more oil to ensure world demand was met.
