The US Senate on 28 January passed the Comprehensive Iran Sanctions, Accountability and Divestment Act. This expands the Iran Sanctions Act of 1996, “to provide for the divestment of assets in Iran by state and local governments and other entities, to identify locations of concern with respect to transshipment, re-exportation, or diversion of certain sensitive items to Iran.” One of the aims of the new bill is to levy heavy penalties on any international company exporting gasoline and other oil products to Iran. Although Tehran‘s implementation of motor fuel rationing since mid-2007 has reduced gasoline consumption by 17.5%, Iran still imports around one-third of its consumption. Currently around 120,000 b/d of gasoline is imported. The Senate bill follows similar legislation that was passed nearly unanimously by the House of Representatives in mid-December. The two respective bills will now go through a “compromise” process in order to be presented as a unified text to President Barack Obama for signing. Both Bills include a “national security waiving clause” that gives the president the authority to waive the implementation of sanctions on foreign companies as long as he justifies it “on grounds of national security.”

Iran has repeatedly scorned US attempts to impose an international embargo on Iranian fuel imports and has initiated a program of gasoline storage, increased fuel rationing and expansion of its refinery capacity by the construction of up to seven new installations in order to double its products output to 3.3mn b/d by 2012. Among expansion projects, China’s Sinopec is developing two catalytic crackers at the Hormuz and Abadan refineries, which are both scheduled for completion in 2011. On 2 February US Director for National Intelligence Denis Blair told the Senate Select Committee on Intelligence that “Iran has made contingency plans for dealing with future additional international sanctions by identifying potential alternative suppliers of gasoline – including China and Venezuela… Tehran also has resorted to doing business with small, non-Western banks and dealing in non-US currency for many financial transactions.” He added that “despite these activities and Iran’s gasoline subsidy cuts, which could in part serve to mitigate some effects of the embargo, we nonetheless judge that sanctions will have a negative impact on Iran’s recovery from its current economic slowdown.”