The United States has refrozen Korea’s payment for Iran’s crude oil exports that South Korea transferred to a Qatari bank as part of a prisoner swap deal between the United States and Iran.
On Oct. 12 (local time), the U.S. government said that Iran will not be able to get its hands on US$6 billion transferred to the Qatari bank as part of a prisoner swap deal between Washington and Teheran in September, according to foreign media outlets. U.S. Treasury Secretary Wally Adeyemo met with Democratic members of Congress and told them that the U.S. and Qatari governments reached an agreement not to allow Iran to take the money on Oct. 12.
In 2019, then-U.S. President Donald Trump imposed a total ban on Iran’s oil exports, stranding a payment of US$6 billion for Iranian oil to South Korea in a South Korean bank. In September, the U.S. unfroze the money and transferred it to the Qatari bank as part of a prisoner swap deal with Iran. The United States lifted the freeze on the condition that Iran use the money only for humanitarian purposes such as buying food and medicine.
However, the recent attacks on Israel by the Palestinian militant group Hamas have raised the U.S. government’s concern that Iran, which has long provided money and weapons to Hamas, may use the money to support the terrorist organization.
The U.S. Biden administration has emphasized that Iran has not yet used any of the funds. Secretary of State Tony Blinken, who is also traveling to Israel, said in a press conference that Iran has neither accessed nor used the money, emphasizing that “we have been keeping an eye on these funds and retain the right to freeze them.”
However, U.S. political circles blamed the U.S. Biden administration’s appeasement of Iran for the outbreak of the violence in Israel and demanded that the funds be re-frozen.
An Iranian representative to the United Nations fired back, saying that the U.S. Biden administration was reacting to political heckling at home and that the funds rightfully belong to the Iranian people and will be used to obtain essential goods not subject to U.S. sanctions.”
A lot of attention is being paid to whether or not the U.S. Biden administration will also heed U.S. political circles’ call to tighten sanctions on Iranian oil exports. Wall Street estimates Iran’s crude oil production at 3 million barrels per day and exports at 2 million barrels per day. In recent years, China has emerged as Iran’s largest oil buyer with Iranian crude exports to China increasing four to five times since 2020, according to experts. Iran is the world’s eighth-largest crude oil producer, producing about 3 percent of global crude oil supply last year.
Former U.S. House Speaker Kevin McCarthy of the Republican Party noted that Iran is making billions of dollars from oil sales and using that wealth to fund terrorism. “I urge the U.S. Biden administration and the Israeli government to jointly map out a plan to destroy Iran’s oil infrastructure,” said Republican Senator Lindsey Graham. “Without oil, Iran will have no money, and without money, terrorism will lose its biggest supporter.”
Experts believe that if it becomes clear that Iran was involved in the Hamas attack, the United States will tighten its sanctions on Iran, leading to a higher oil price. Some believe that the U.S. Biden administration will not tighten its sanctions on Iran in order to stabilize international oil prices.