In the midst of deadlocked nuclear talks, the Biden administration removed sanctions on three former Iranian leaders and many energy businesses, suggesting Washington’s willingness to relieve economic pressure on Iran if the nation reverses direction.
Sanctions on former top officials of the National Iranian Oil Company and other firms involved in shipping and trading petrochemical goods were lifted by the US Treasury Department on Thursday. The steps were presented by the administration as regular administrative measures, with the officials being removed off US blacklists since they no longer worked for sanctioned businesses.
But officials familiar with talks under way in Vienna on the future of the 2015 multilateral Iran nuclear agreement said the Biden administration has been looking at how it could inject momentum into the negotiations. Oil prices fell roughly 2% in response to the announcement, but rapidly recovered, remaining above $70 per barrel.
“These actions demonstrate our commitment to lifting sanctions in the event of a change in status or behavior by sanctioned persons,” Secretary of State Antony Blinken said in a statement accompanying the notice of the action.
The actions came as U.S., Iranian, European and Chinese negotiators in Vienna are preparing to resume a sixth round of talks to restore the 2015 nuclear deal with Iran, the U.S. and five other world powers. Discussions are expected to start up again this weekend in Vienna, according to people involved in the negotiations.
State Department spokesman Ned Price told reporters later Thursday that the actions have “absolutely no connection” to ongoing negotiations on the nuclear agreement. A Treasury official also said, “This is not a wider easing of sanctions on the oil sector of Iran.”
The Iranian mission to the United Nations didn’t immediately respond to a request for comment.
U.S. and European officials have said significant differences remain between Washington and Tehran over how to restore the nuclear deal, including the extent of any potential sanctions relief.
Signed in 2015, the nuclear agreement known as the Joint Comprehensive Plan of Action lifted international economic sanctions on Iran in exchange for temporary constraints on the country’s nuclear program.
President Donald Trump withdrew the US from the agreement in 2018, calling it one-sided and claiming it provided Iran with funds for its military, weapons development, and terrorist organizations elsewhere in the region.
In an effort to push Iran back to the negotiating table for a stricter deal, the Trump administration reimpose sweeping sanctions on Tehran, hitting every major export sector and helping pitch the country into a deep economic depression.
Besides the oil and banking sectors, the sanctions also included the shipping, construction, auto, and metal industries and targeted hundreds of Iranian officials, financial trusts and companies by name. They effectively froze most international business dealings with Iran, threatening U.S. and foreign companies if they traded with Iran, including purchasing Iranian oil, natural gas or petrochemical products.
Iran has remained a signatory to the agreement despite consistently violating several of its terms, notably those relating to uranium enrichment. Before bringing its nuclear operations back in line with the 2015 accord, the nation has persistently asked that the US eliminate practically all sanctions. China, France, Germany, Russia, and the United Kingdom are still part of the agreement.
The Vienna negotiations now look very likely to drift past Iran’s presidential elections on June 18, which some Western officials saw as a target date to complete the talks because of their potential effect on Iran’s position.
U.S. officials have said they would be prepared to lift most sanctions on Iran’s oil, petrochemical and shipping sectors as part of a deal to restore the 2015 nuclear agreement. So far, the U.S. has insisted it will maintain other antiterrorism sanctions, including on the Islamic Revolutionary Guard Corps, a paramilitary group that retains significant influence on Iran’s government, economy and foreign policy. Indeed on Thursday, even as it lifted some sanctions the U.S. also levied new ones against a group of men and companies that U.S. officials said are helping fund the Islamic Revolutionary Guard Corps and Houthi rebels in Yemen.
The removal of sanctions on Thursday, according to critics of the administration’s Iran policy, will weaken Washington’s bargaining position with Iran.
“Lifting sanctions during negotiations shows weakness to Iran and tells Tehran to continue its nefarious activities, including nuclear extortion and sending conventional arms to U.S. adversaries,” said Anthony Ruggiero, a former top national security adviser to President Trump now at the Foundation for Defense of Democracies, a think tank that advocated for tougher sanctions.
Several Republican lawmakers said the action confirmed their fears about the Biden administration’s Iran policy.
“The Biden admin is rushing to dismantle sanctions on Iran, including and especially their oil industry and shipping, before even the pretense of a deal,” said Sen. Ted Cruz, (R., Tx.), in a tweet from his official account. “What happened to Biden’s promise not to give the Ayatollah unilateral concessions?”
Thursday’s moves represent a sliver of the broad spectrum of Iranian sanctions and aren’t expected to yield any significant financial or economic relief to the country. Combined with the significant differences that remain between the parties negotiating in Vienna on how to restore the 2015 deal, the sanction removals themselves aren’t expected to break the existing impasse.
Still, deletions from Iran sanction rolls are relatively rare, according to data available on the Treasury Department’s website, with less than a handful in recent years. The last removal — in January last year — involved a major Chinese shipping company that vowed to no longer handle Iranian cargoes.
Thursday’s action, therefore, signals to Iran that the Biden administration not only has a willingness to act, but the administrative and legal capability to do so, analysts said.
The NIOC officials were sanctioned in 2013 for allegedly evading sanctions levied against the Iranian government as the Obama administration sought to press Tehran into a nuclear deal. U.S. officials at the time said the action was aimed at disrupting Iran’s nuclear and weapons programs. The companies that were removed Thursday were blacklisted in 2020 for allegedly helping Iran’s sanctioned petrochemical trade, which the Trump administration said Iran’s government used to help it finance groups designated by the U.S. as terrorists.