State Dept Confirms: Iran Now Shipping Oil to Syria

Oil shipments may violate interim nuclear accord

Syrian President Bashar Assad, left, talks to government soldiers / AP
June 12, 2014

 The State Department confirmed on Wednesday that Iran has been shipping crude oil to Syria for the past several months, behavior that some experts say is in direct violation of the interim nuclear accord signed last year with the Obama administration.

Deputy Assistant Secretary for Energy Diplomacy Amos Hochstein, during remarks before the House Foreign Affairs Committee, confirmed rumors that Iran is now delivering oil to the embattled regime of Syrian President Bashar al-Assad, who has been helped financially and militarily by the regime in Tehran.

"It is true that over the last few months Iran has begun to direct shipments of crude oil to Syria for the first time," Hochstein told lawmakers. "They were done every once in a while before that. That is because Syria’s ability to get crude oil on the market and from traders has vanished. And as a result Iran has had to step in."

Lawmakers remain concerned that Iran’s growing oil exports are offsetting economic sanctions by providing the regime a huge cash influx, and could constitute a violation of the interim nuclear accord.

However, the State Department says it is not overly concerned about these shipments because Iran is not being paid by Syria for the oil, Hochstein said.

The comments stoked concern from regional experts who said that the oil shipments to Syria constitute a violation of U.S. sanctions and previous agreements.

"The administration's argument that the Iranian delivery of crude oil to Syria should not be counted as a violation of the JPOA or U.S. sanctions laws is the triumph of bureaucratic legalese over strategic common sense," Mark Dubowitz, the Foundation for Defense of Democracy’s executive director, said in a statement provided to the Washington Free Beacon.

"Providing free barrels to Assad's killing machine is of clear financial and strategic benefit to Iran, which, thanks to the administration's flexibility in permitting higher crude sales, can now fuel its ally in Damascus without having to spend its cold, hard cash," Dubowitz said.

The administration argues that the shipments to Syria are of no consequence since Iran is not financially benefitting from the exchange.

These shipments are "a very different kind of delivery because unlike the other six customers that they still have, Syria doesn’t pay," Hochstein told Congress. "So this doesn’t contribute to the overall economic benefit to Iran. And therefore does not remove the economic pressure that the sanctions sought to bring. So when we look at what are the current levels of exports, we mean people who are buying."

The White House and Treasury Department—which have both overseen a rollback in sanctions since the interim accord was signed—declined to comment on Iran’s shipments to Syria, instead directing a report to the State Department.

State Department spokeswoman Jen Psaki offered a similar defense when confronted by reporters at Wednesday’s daily briefing. Psaki told reporters that the shipments to Syria are "obviously a different circumstance" and should not be seen as a boon to Tehran’s economy.

Hochstein further maintained that even though Iranian oil sales are not supposed to significantly top one million barrels per day under the interim accord—which they consistently have since January—Iran is not seeing any money from these sales.

"Even when they do sell these million to 1.1 million [barrels per day] to these six customers, they are not getting the money and the access to the cash," Hochstein said. "That money is still going to accounts that are blocked in those countries and have to remain, under certain conditions, in those countries. So with that, I think that we’re still comfortable. We are concerned about some of the reports."

Asked about numerous reports conflicting with the administration’s own information about Iranian oil exports, Hochstein revealed that the Obama administration tends to deflate the number by disregarding certain petroleum products from the equation.

Rather than including the export of crude oil and condensate, a natural gas present in many fuels, the administration disregards the latter product.

It is quite common for nations to report oil sales as a combination of crude oil and condensate.

This disclosure came as a shock to members of Congress, who said that this does not abide by the spirit of the law as written in various pieces of sanctions legislation.

"So you are telling me that the way that this is analyzed, that the reason that there are those that say it has been over a million bpd in violation of the statute that would trigger sanctions, is because there is an artificial line being drawn between crude oil and condensate that doesn’t typically exist outside of the sanctions world?" asked Rep. Ted Deutch (D., Fla.), who expressed great surprise.