WASHINGTON—During a Foreign Relations Committee hearing today on Iran’s proxy network in the Middle East, U.S. Senator Mitt Romney (R-UT) questioned the Biden Administration’s logic for not fully enforcing sanctions against Iran amid attacks by various Iranian proxy groups on United States and partner forces in Iraq, Syria, and Jordan. Senator Romney also expressed disappointment that no government officials appeared at this hearing to answer questions concerning the Administration’s latest posture toward Iran.
A transcript of Romney’s exchange with the witnesses is below and video can be found here.
Senator Romney: Thank you, Mr. Chairman. And thank you to the witnesses for your testimony. It’s been most instructive, and I want to join my words with those of others with regards to the threats against Mr. Hook and against others in the prior administration as a result of taking a brave action to protect American lives by taking out General Soleimani. It is outrageous, in my view, that the fatwa continues to be heralded by Iran and how we can have anything other than a most hostile relationship with Iran when that continues is beyond me. I find it unfortunate that we don’t have a member of the Administration here. I’d like to understand the logic for their current position, how it may have changed, what their views are for going forward. It’s helpful to hear from experts such as yourselves, but you raise questions that really need to be responded to by the by the current administration. I do understand, Mr. Hook, you made the point that given the Administration’s interest in getting a renewed discussion on the JCPOA, that they wanted to create a friendly environment and therefore soften the oil sanctions to create that environment.
But surely at this point, given what’s going on in the Middle East and the attacks by these various proxy groups, the Administration is no longer trying to have a friendly environment with Iran. But what do you imagine accounts for the fact that we have not dramatically tightened our oil sanctions? I don’t understand what the logic would be for not engaging now in crippling sanctions against Iran and their oil revenue. And I’ll ask you, Dr. Maloney and then Mr. Hook.
Dr. Suzanne Maloney: We do have in place ostensibly crippling sanctions on Iran’s oil exports and as Mr. Hook noted at the outset, they were respected by the international community because of the recognition that it would complicate doing business in the United States as the power of the reach of the U.S. dollar. Over time, the Chinese began to test that resolve, to test those opportunities. They also worked with the Iranians in a very sophisticated set of smuggling and evasion tactics. The Chinese have companies that are not banks in any way connected to the U.S. financial system, and so they are less vulnerable to American financial pressure. And over time, this has created a vast network that has enabled Iran to export illicitly in violation of current U.S. sanctions. Without a very easy way for us to impose severe costs on the companies that are in fact importing.
Romney: Thank you, Mr. Hook.
Honorable Brian Hook: I had this sort of conversation with countries around the world, and it’s what Senator Hagerty mentioned earlier. I said that you can either do business with Iran and buy their oil and buy their metals and buy their petrochem, or you can do business with the United States. And any country faced with that choice, it will be the easiest decision they’ve ever made. They’re going to side with the United States. That is the economic leverage we have that Dr. Maloney mentioned. I think the Biden Administration hesitated to enforce the oil sanctions at a level that they should be until like the summer of 2022, when it became clear that the Iranians were toying with our negotiators.
I think since then, the Biden Administration has done some sanctions against WMD proliferators and human rights violators, but they haven’t done it against oil. They have shown an interest in energy sanctions in the context of Russia, but they need that sort of level of sort of vigor and enforcement in Iran. And that is going to, I mean, look, Iran represents about 3% of the world’s oil supply, and they maximum around 2.5 million barrels.
We took them down to 300,000 barrels of oil in about 12 months…and China has most of it. You have to drive up the costs in the bilateral relationship with China to get that number lower. That will impose an economic crisis on Iran. And it causes them to start changing their thinking around their proxies and their nuclear program.
Romney: You make the point that China is the major provider of the funds in purchasing the oil from Iran, cutting off a relationship with China and saying to China, “hey, it’s either Iran or us.” Is that what you’re proposing? Saying to China, “we will shut you off?” The challenge, of course, is that our economy depends on a lot of things coming from China. So…it’s one thing to say that to Lebanon or other countries, but to say that to China is a very different matter.
Hook: Well, Senator, I remember when I was in office and when we started our oil sanctions after we got out of the Iran Nuclear Deal. I’ll just mention, when you’re in the Iran Nuclear Deal, you can’t touch the oil. And that is an enormous handicap. And so getting out of the Iran Nuclear Deal allowed us then to go after the oil revenue, which funds their proxies. And so when we were looking at China and its imports, we did sanction a lot of Chinese banks, but it wasn’t enough…There are many aspects to our bilateral relationship with China.
This has to be a big part of it. When we started our oil sanctions, the price of Brant crude was 74. We lowered it to 72, even after taking off almost 3% of the world’s oil supply. And I worked with oil ministers around the world to increase production to offset the loss of Iranian crude on the global energy markets. So you can zero out Iran’s oil exports and still not have a shock, an energy shock, if you work with other oil ministers to increase production.