• 27 August 2009
  • Posted By David Elliott
  • Sanctions

Why petroleum sanctions only make things worse

Congress is currently considering legislation that would expand unilateral sanctions and target companies exporting refined petroleum to Iran. As of today, the Iran Refined Petroleum Sanctions Act has 294 cosponsors in the House and 72 in the Senate. It’s an incredible level of support for something that will just make things worse for the people of Iran and won’t increase U.S. security. Here’s why it’s a bad idea:

The Iranian people are already protesting in the streets. But sanctions and threats will help the hardline government consolidate its hold on power.

  • The politics of fear is the bread and butter of Iran’s hardliners. But now, President Obama’s outreach to Iran has deprived them of their perennial boogeyman as the divisions in Iran’s political system have cracked open.
  • Imposing sanctions against Iran over its nuclear program, which has widespread support, would only enable the hardliners to once again be able use the specter of a foreign threat to justify domestic repression and consolidate its support.
  • Imposing broad sanctions on Iran will likely only weaken Iranian civil society and bolster the state’s repressive apparatus – just as it did in Iraq.

A gasoline embargo actually benefits the government of Iran.

  • A gasoline embargo would enable the government to eliminate burdensome subsidies and place all the blame on the United States.
    • Iran has to import roughly 40 percent of its domestic gasoline consumption at market prices and then resell it at a subsidized price of about 40 cents per gallon.
    • These subsidies cost the government of Iran between 10 and 20 percent of GDP, annually.[i] The Iranian government has tried several times to eliminate the subsidies, but has been stymied by popular opposition. An embargo would provide the excuse they need, and free up the government to spend the money elsewhere.

An embargo would hurt the people of Iran.

  • Just like in the United States, Iran’s poor will bear the brunt of any gas price shock. Between its domestic production and smuggled petroleum, the mullahs and IRGC will surely find a way to keep their gas tanks full and their homes warm in the winter.
  • Even neoconservative scholar Fred Kagan has acknowledged the real effect of petroleum sanctions, saying “Look we need to be honest about this: Iranians are going to die if we impose additional sanctions.”

[i] Hossein Askari and Trita Parsi, New York Times. August 14, 2009.

Posted By David Elliott

David Elliott is the Assistant Policy Director at the National Iranian American Council.

    One Response to “Why petroleum sanctions only make things worse”

  1. Megan says:

    I have written on this topic before. NIAC has no clue what Iranian people, who live and die in Iran, want and neither does the Obama administration. Your analysis in this post has no factual basis. Out of respect for innocent lives lost in Iran in the past 30 years I ask NIAC to stop being a mouth piece for Obama administration and stop apologizing for it. Stop serving the interest of a few Iranian living in the U.S.

    Iranian people who live in Iran are preparing to do their parts when the petroleum embargo takes effect by buying and damping gasoline in the sewer in order to run the government out of its reserve faster. They want to speed up the fall of the regime of torture, rape, execution, and murder. For God’s sake and in the name of humanity stop denying them that by meddling and by acting as if you live in their shoes.

    I have been reading your posts and slanted views and have been quietly outraged. I, however, will not be quite anymore and will start writing and calling every member of Congress and pass on the REAL sentiment of Iranian who live in Iran to them. I let them know how Iranians living in Iran are anxiously waiting for gasoline embargo to kick into gear.

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