Republicans have castigated President Joe Biden’s administration for freeing up $6 billion in funds for Iran’s Islamist regime, money that likely contributed to Tehran’s funding of Hamas, the genocidal terrorist group that slaughtered more than 1,400 Israelis and took about 200 hostage Oct. 7.
Yet the Biden administration’s policies freed up far more than $6 billion for Iran.
“It’s a drop in the bucket,” Robert Greenway, director of The Heritage Foundation’s Center for National Defense, told The Daily Signal in an interview Wednesday. (The Daily Signal is Heritage’s news outlet.)
Greenway led a team to plan and execute the most significant U.S. economic sanctions against Iran. He served as a principal architect of the Abraham Accords, working as deputy assistant to President Donald Trump and senior director of the National Security Council’s Middle East and North African Affairs Directorate.
Referring to Iran, Greenway described the released $6 billion as “a fraction of the overall revenue that the Biden administration consciously has allowed them to have.”
He said Biden’s policies, by relaxing Trump’s “maximum pressure” campaign and signaling his willingness to strike a new nuclear deal with Iran, has emboldened Tehran and signaled other countries in the region that they should work with Iran.
“We’re encouraging everyone else to do this. Everybody in the region is paying Iran not to attack them,” Greenway warned.
He urged that the U.S. stop paying Hamas through funds ostensibly for Palestinian aid.
“This is extortion. I pay so Gaza won’t attack again,” Greenway said. “We should stop writing checks.”
While Greenway acknowledged Biden’s strong rhetoric in support of Israel, he said Americans and Israelis should see through that facade.
“I literally paid the people who attacked you,” Greenway said, speaking as though he were Biden. “No one should be defending this. No one in Israel can think that Biden is their friend.”
According to The Daily Signal’s calculations, Iran has received approximately $71.02 billion more under Biden than it would have under Trump.
Biden repeatedly has said that there is no “specific evidence” showing that Tehran had any involvement in the Hamas terrorist attack, but Iran has funded Hamas for years.
Hamas spokesman Ghazi Hamad told the BBC that Iran gave the green light for the attack. The Wall Street Journal reported that “senior members of Hamas and Hezbollah” confirmed that “Iran’s Islamic Revolutionary Guard Corps had worked with Hamas since August to devise the air, land, and sea incursions.”
Furthermore, Greenway and another Heritage Foundation national security expert, Victoria Coates, wrote: “Absent significant training, equipment, and intelligence capabilities supplied by Iran, Hamas would never have been able to have carried out such an operation.”
The $6 billion figure traces back to 2018, when the Trump administration granted a waiver to South Korea, among other nations, to continue buying Iranian oil after the U.S. left the 2015 nuclear deal.
The Trump administration canceled these exemptions in 2019, diverting payments for already-delivered oil into escrow accounts. Biden agreed to release the $6 billion South Korea owes Iran as part of a prisoner exchange in August.
The Biden administration has insisted that the $6 billion would fund only humanitarian projects, but money is fungible. Even if that money would support only infrastructure, health care, or education, it would free up funds for Tehran to send money to Hamas. Even if none of that money had been spent before Oct. 7, as the Biden administration has insisted, Tehran may have spent money elsewhere, expecting those funds to materialize.
Perhaps in response to criticism regarding the unfrozen funds, Deputy Treasury Secretary Wally Adeyemo told House Democrats that the U.S. and Qatar agreed to prevent Iran from accessing the $6 billion. It remains unclear whether any of that money had made it back to Tehran, but Secretary of State Antony Blinken said none had.
Even if Tehran doesn’t receive a penny from South Korea, the Biden administration has allowed more funds to flow to Iran from other sources.
$10 Billion From Iraq
In July, Blinken signed a 120-day national security waiver allowing Iraq, which is heavily dependent on Iranian electricity, to deposit payments into non-Iraqi banks in third countries instead of into restricted accounts in Iraq, Reuters reported.
Blinken did so as Tehran ratcheted up the pressure to release Iraq’s debt to Iran, totaling at least $10 billion, according to The Wall Street Journal. Some of that money may be denominated in dollars because the Federal Reserve provides dollars to Iraq in order to maintain a favorable trade balance.
Iraq relies upon Iranian natural gas, and sometimes repays Tehran in oil.
The U.S. reportedly granted the waiver in order to prevent Tehran from cutting power to Iraq during the heat of the summer. U.S. officials said the funds deposited into non-Iraqi accounts still would be restricted, requiring U.S. permission for Iran to access them and only for spending on humanitarian goods.
$52.2 Billion in Extra Oil Revenues
As president, Trump imposed “maximum pressure” sanctions on Iran, especially following his withdrawal from the Obama-era Iran nuclear deal in May 2018. Yet Biden campaigned on restoring the nuclear deal with Iran and loosening the sanctions, which sent a strong signal to global markets, according to Benham Ben Taleblu, a senior fellow at the Foundation for the Defense of Democracies.
“Markets are real, markets work, and when you send the wrong incentives, you get a whole bunch of risk-tolerant buyers becoming more active,” Ben Taleblu told The Daily Signal in a phone interview Tuesday.
Even before Biden took office, China and other buyers began to import more oil from Iran, anticipating the loosening of U.S. restrictions. Biden didn’t repeal the laws that impose sanctions on Iran’s oil industry, but his rhetoric still brought a windfall for Iran as buyers started to “capitalize on that sentiment in the market,” Ben Taleblu said.
Meanwhile, the Biden administration has undertaken fewer enforcement actions, and sanctions can atrophy when not enforced.
Ben Taleblu and his colleague Saeed Ghasseminejad (a senior Iran and financial economics adviser) estimated that Iran has sold $95 billion worth of oil since Biden entered office.
They estimated that about $32 Billion of that represents an excess. That number represents “the excess funds that Iran was able to generate because of relaxed or unenforced maximum pressure sanctions that legally remain on the books but de facto are not enforced,” Ben Taleblu said.
Yet that number relies on the assumption that the price of oil would have increased under Trump as it has under Biden, and that Iran would have been able to sell its oil at the market price. While it is unclear exactly how low Iran has to drop the price to convince buyers like China to purchase the oil, it stands to reason that the price of oil would have remained approximately $55 per barrel had Trump remained in office in 2021.
Had Iranian exports remained at the baseline “maximum pressure” level of 0.775 million barrels of oil per day (282.9 million per year) at $55, that translates to $15.6 billion per year, or $42.8 billion from January 2021 to October 2023.
This translates to a $52.2 billion windfall.
$3.8 Billion in Petrochemicals
As the Trump administration imposed sanctions on oil, Iran turned to the sale of petrochemicals, products derived from petroleum, to retain revenues.
Iran exported 25 million metric tons of petrochemicals and received approximately $20 billion in 2020, Reuters reported. This represented a jump over the 20 million tons Iran sold in 2019.
According to Oil & Gas Middle East, Iran sold 27.6 million tons between March 21, 2022, and March 20, 2023, which translates to approximately $22 billion during that time. That represented a 6% increase from the previous year, which means Iran sold approximately 26 million tons that year, which translates to approximately $20.8 billion.
Assuming Iran has netted another $11 billion from petrochemical sales in the past six months, the Islamist regime has received approximately $53.8 billion since March 2021. This represents a $3.8 billion increase over the $50 billion Iran would have received from petrochemical exports had the rate stayed the same since 2020.
$1.6 Billion in Steel
Iran exported 5.88 million metric tons of steel between March 21, 2019, and Jan. 20, 2020, Iran reported in 2020. This translates to an annual rate of 7 million tons. In calendar year 2018, Iran exported 9.2 million tons at a value of $4.2 billion, according to the U.S. Department of Commerce.
The Trump administration imposed sanctions on Iran’s steel industry, which the Biden administration hasn’t enforced.
According to a May report from the Iranian Steel & Iron Ore Market Conference & Expo, Tehran expects to export 14 million tons of steel between March 21, 2023, and March 21, 2024, about 4 million tons more than the approximately 10 million exported between March 2022 and March 2023.
Yet Iran exported only 4.2 million tons of steel from March 2021 to March 2022, an Iranian steel producer reported.
If Iran remained on track to export 14 million tons by March 2024, it would have exported 7 million tons through the end of September, totaling 21 million tons since March 2021. That translates to $9.597 billion since the beginning of the Biden administration. If Iran exported steel between March 2021 and September 2023 at the same rate as it did between March 2019 and March 2020, it would have exported 17.5 million tons. That translates to approximately $8 billion, meaning that Iran received approximately $1.6 billion more under Biden than it might have under Trump.
$3.42 Billion in Special Drawing Rights
The International Monetary Fund created special drawing rights to supplement the official reserves of member countries. Countries may use these rights to infuse cash into their economies.
In August 2021, the IMF sent $3.42 billion to Iran in special drawing rights. According to the Foundation for the Defense of Democracies, the Biden administration had the authority oppose this allocation and did not do so. U.S. law mandates that the IMF’s American executive director oppose allocating any funds to a state sponsor of terror.
Mohammed Reza Farzin, the governor of the Central Bank of Iran, and his deputy for international affairs, Mohsen Karimi, said during a May 30 meeting with IMF officials that Tehran had access to $6.7 billion worth of special drawing rights, which Iran could use promptly to help meet the country’s “economic needs.”
Although it remains unclear how much money in special drawing rights Tehran has accessed, the Biden administration has the power to block such moves.
“While there are unconventional ways for Iran to use its [special drawing right]s, for example as collateral to get a line of credit from an IMF member country, I do not assess that this has happened at this point but there is little doubt Iran is seeking ways to do that,” the Foundation for the Defense of Democracies’ Ghasseminejad told The Daily Signal in a statement Wednesday.
Toby Dershowitz, senior vice president of government relations at the foundation, noted that the Financial Action Task Force “sets standards for anti-money laundering and combatting the financing of terrorism.” Iran remains on the task force’s blacklist, she noted.
“It would be deeply concerning should the IMF to permit a global terror financier known also for its financial corruption, to access SDRs until it ceases its malign conduct,” Dershowitz added.
Other Funds Iran May Try to Access
Other countries still owe Iran for oil purchased in 2018. Iranian Foreign Minister Hossein Amir-Abdollahian visited Japan in August and urged Tokyo to release the $3 billion owed to Tehran. It remains unclear how much other countries still owe Iran.
Last week, Biden warned Iran to “be careful” amid Israel’s war with Hamas. The Biden administration has a plethora of options to crack down on Tehran after Iran’s proxy attacked Israel.
The administration’s previous record already has translated to an extra $70 billion flowing to Iran’s ruling mullahs.
Neither the Biden White House nor the State Department nor the Treasury Department responded to The Daily Signal’s request for comment by publication time.
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