Already a Bloomberg.com user?
Sign in with the same account.
Feb. 1 (Bloomberg) -- Iran has adapted to tightened sanctions by decreasing its dependence on imported refined petroleum products, as the U.S. stepped up penalties on foreign firms involved in Iran’s energy industry, according to two reports released today by the U.S. Government Accountability Office.
“Iran has attempted to reduce its dependence on foreign refined petroleum products by reducing gasoline subsidies to its citizens in order to reduce demand, converting petrochemical facilities to produce gasoline, as well as expediting the construction of new refineries or the expansion of current refineries,” one report concluded, citing officials from the U.S. Departments of State and Energy.
The report said Iran’s imports of gasoline had declined from 130,000 barrels a day in 2009 to 50,000 barrels a day last year, according to Petroleum Intelligence Weekly.
The U.S. has imposed numerous sanctions on Iran, including legislation signed into law July 1, 2010, that provides for sanctions against foreign firms that engage in certain activities in Iran’s energy sector, including selling or providing Iran with refined petroleum.
Since the enactment of the July 2010 law, Secretary of State Hillary Clinton has sanctioned 13 foreign firms under the Iran Sanctions Act, two for investments in Iran’s energy sector and 11 for supplying Iran with refined petroleum products. The sanctions made 10 firms ineligible to receive U.S. government contracts, and the administration is in the process of listing the remaining three, the second report said.
None of the 13 firms sanctioned by the State Department held U.S. government contracts, were registered for solicitations for contracts, or submitted an offer after the certification requirement went into effect, the report said.
Even so, the number of firms selling refined petroleum products to Iran has decreased in the last year, the GAO said, citing open-source reports.
Eleven of the 16 firms cited in a 2010 report were reported in open sources or indicated in letters to the GAO that they had ceased sales of refined petroleum products to Iran. The GAO report identified four foreign firms -- Petróleos de Venezuela SA, China Oil, Unipec, and Zhuhai Zhenrong -- as reported to have sold refined petroleum products to Iran between July 1, 2010, and December 31, 2011.
The U.S has steadily tightened sanctions on Iran over the past few years in an effort to hit Iran’s economy and pressure its leadership to abandon illicit elements of its nuclear program.
Iran’s Oil Income
The U.S., European allies and Israel accuse Iran of trying to acquire the ability to build nuclear weapons. Iran’s leaders say their program is solely for civilian energy and medical research.
Oil is Iran’s main source of income, supplying more than 50 percent of the national budget, according to International Monetary Fund figures. Oil provided the Persian Gulf nation $56 billion in the first seven months of 2011, according to the U.S. Energy Department.
Crude for March delivery fell 84 cents a barrel to $97.64 at 2:06 p.m. on the New York Mercantile Exchange.
Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, pumped about 3.545 million barrels of oil a day last month, a Bloomberg survey showed, and exported an average 2.58 million barrels a day in 2010, according to OPEC statistics.
The GAO reports were prepared for the Senate Homeland Security and Governmental Affairs Committee.
--Editors: Terry Atlas, Bob Drummond
To contact the reporter on this story: Indira Lakshmanan in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: John Walcott at email@example.com