The measure was passed by the US House of Representatives over the weekend, Bloomberg wrote.
But oil market analysts say Biden will be loathe to make any moves that could increase the price of crude or the gasoline that US motorists buy at the pump. The president is likely to take advantage of the waiver authority built into the sanctions and avoid stringent enforcement, according to policy experts. The administration also permitted Venezuelan oil to continue flowing last week even as it renewed sanctions aimed at President Nicolas Maduro.
“Oil traders are nonchalant because they know Biden will certainly sign whatever waivers are necessary to keep Iranian oil flowing into the market just as he is keeping Russian barrels flowing into the market,” said Jim Lucier, managing director at Capital Alpha Partners, a Washington-based research group.
The White House National Security Council declined to comment on the sanctions. The administration is still analyzing the legislation, but no impact on oil markets is expected before the fall, a person familiar with the matter said.
The oil market is particularly sensitive right now to the potential for further constraints. Brent crude prices exceeded $92 a barrel earlier in April, their highest in almost six months, amid strong global demand and ongoing production cuts by OPEC and its allies.
If implemented and enforced, the new sanctions could add as much as $8.40 to global prices, according to ClearView Energy Partners, a Washington-based consulting firm.
While US gasoline prices are still some way off the levels seen then, they have advanced this year, with peak driving season still to come.
There is a “new element of risk” that the measure could be directed at ports, vessels and refineries that engage in the shipping, processing and other transactions involving Iranian crude oil, said Fernando Ferreira, director of Rapidan Energy Group’s geopolitical risk services. However, they’re also subject to a potential waiver, allowing Biden to make exemptions in cases where national security is deemed a concern.