While the US has been in turmoil since President Donald Trump contested the results of a Joe Biden win in the presidential elections by claiming election fraud, oil giants Iran and Venezuela are hoping to resume diplomatic relations with the US under the new administration.
The removal of sanctions on Iran and Venezuela, however, will not be “a policy priority” for the Biden administration, said Jim Krane, a Houston-based energy research fellow at Rice University’s Baker Institute.
Krane stressed that Iran has already begun increasing exports through various means. “We’ll probably see Iranian oil exports continue to grow under a Biden administration even if US sanctions are not lifted,” he said.
Two months before Trump is due to hand over power to Biden, the US on Wednesday imposed broad sanctions targeting Iran, blacklisting a foundation controlled by Supreme Leader Ayatollah Ali Khamenei.
The US upped the ante against Iran since withdrawing from the 2015 nuclear agreement in 2018, by reinstalling sanctions.
However, since the beginning of 2020, tensions have escalated alarmingly with the Trump administration announcing a 'maximum pressure' campaign to choke Iran’s financial channels.
In September, after the demand for an extension of the arms embargo was rejected by the Security Council, the US announced the reinstatement of all UN sanctions against Iran.
“Sanctions relief for Iran would not be a high priority for Biden if he takes office, but his administration would certainly be less interested in enforcing existing sanctions. I would expect Iran to take advantage of the lack of interest to increase unofficial shipments,” Krane said.
Regarding the possibility of new US-Iran negotiations, Krane reiterated that resuming talks with Iran would not be among the urgent priorities facing the new US president.
During the election campaign, Biden had expressed his desire to resume diplomacy with Venezuela and Iran, both members of the Organization of the Petroleum Exporting Countries (OPEC).
Biden had signaled he would be seeking the path of diplomacy with Iran if the country returns to strict compliance with the nuclear deal.
In an opinion piece on CNN, Biden said there is “a smarter way to be tough on Iran' than President Trump's hard-line on the country.
'I will offer Tehran a credible path back to diplomacy. If Iran returns to strict compliance with the nuclear deal, the United States would rejoin the agreement as a starting point for follow-on negotiations. With our allies, we will work to strengthen and extend the nuclear deal's provisions, while also addressing other issues of concern,' Biden wrote.
This was perceived as leaving the door open to ease sanctions.
- Venezuela is a trickier problem
The White House launched a series of sanctions after Nicolas Maduro's inauguration in January 2019 targeting the government of Venezuelan Socialist President Maduro, which has hampered the economy of the oil-rich South American nation.
The country’s state-owned oil company Petroleos de Venezuela, S.A. (PDVSA) has been hit by US sanctions as well.
Venezuela is struggling with a 2,400% inflation rate and sanctions under the Trump administration. And now, as the US is preparing to go through a new administration under Biden, the question that comes to mind is 'What now?'
However, as relations between the US and Venezuela remain at a historic low, any easing of pressure is unlikely to happen quickly and, even if it happens, analysts agree that it will not happen overnight.
“Venezuela is a trickier problem,” said Krane, adding, “US sanctions have been problematic, but not nearly as damaging as Venezuela’s oil sector mismanagement.”
“Even if Biden were able to lift sanctions, the Venezuelan oil sector would be difficult to revive in the short run,” Krane said, adding that Biden would also not be in a hurry to ease sanctions against Venezuela.
By Firdevs Yuksel and Sibel Morrow