Iran-China Energy Sanctions Act
The U.S. House of Representatives passes a bill banning China from buying Iranian oil, targeting financial institutions
The U.S. House of Representatives passed the Iran-China Energy Sanctions Act this week, targeting Chinese financial institutions involved in buying oil from Iran.
Key Concepts
- The U.S. House of Representatives passed the Iran-China Energy Sanctions Act, targeting Chinese financial institutions involved in buying oil from Iran.
- The bill requires the U.S. president to determine if Chinese institutions are buying oil from Iran and prohibits U.S. financial institutions from opening or maintaining certain accounts with those Chinese institutions.
- The bill was introduced by Republican Representative Michael Lawler and co-sponsored by members of both parties.
- The prospects of the bill in the Senate are uncertain.
- President Biden is unlikely to take major actions to cut off Iran’s oil lifeline.
- Analysts suggest concerns over gasoline prices and the U.S.-China relationship may deter aggressive action against Iranian oil exports.
- Actions to crack down on Iranian oil exports may be taken to prevent the escalation of conflicts in the Middle East, but they are unlikely to be as severe as sanctions against China’s big banks.
- Sanctions may target the Chinese or other entities involved in the trade with Iran.
The bill, which the House of Representatives passed overwhelmingly on Monday night (April 15), requires the U.S. president to regularly determine whether any Chinese financial institutions are engaged in buying oil or petroleum products from Iran. The bill also stipulates that U.S. financial institutions are prohibited from opening or maintaining certain accounts with Chinese financial institutions that engage in such transactions. The bill was sent to the Senate on Tuesday (April 16).
This bill was introduced by Republican Federal Representative Michael Lawler of New York State in October 2023 and was co-signed by representatives from both the Republican and Democratic parties.
Rep. Josh Gottheimer of New Jersey, a Democrat who co-sponsored the bill, said on the House floor Monday: “Our bill allows two members of the ‘Axis of Evil’—some of our most dangerous adversaries, Iran and China—to be held accountable for their evil actions.”
A bill must be passed by the Senate and the House of Representatives in identical versions before it can be sent to the President to be signed into law. The bill’s current prospects in the Senate are unclear.
The media analysis reported that despite Iran’s attack on Israel over the weekend, Biden is unlikely to take major actions to cut off Iran’s oil lifeline.
The report quoted several regional affairs analysts as saying that they were not sure that the Biden administration would take major actions to increase existing U.S. sanctions to cut off Iranian crude oil output. Analysts say the possible impact on gasoline prices is one reason why Biden may not be aggressive. In addition, strict enforcement of sanctions may also plunge the U.S.-China relationship that both sides are trying to repair into turmoil.
Several analysts interviewed by the media believe that Washington may take some actions to crack down on Iranian oil exports, in part to moderate Israel’s response to Iranian attacks and to prevent the escalation of conflicts in the Middle East. However, these analysts said such a crackdown would not be as dramatic as sanctioning China’s big banks but would more likely be sanctions against Chinese or other entities engaged in such trade.
By
