Marco Rubio has long pushed for a tougher U.S. policy on Iran and China [Getty]
President-elect Donald Trump’s pick of U.S. Senator Marco Rubio for secretary of state could signal stricter enforcement of oil sanctions on Iran and Venezuela, but concerns about retaliation by China could temper any efforts, analysts said on Wednesday.
Rubio, a longtime member of the Senate Foreign Relations Committee, has long pushed for a tougher U.S. policy on Iran and China.
Rubio, whose parents immigrated from Cuba to the U.S., is also a critic of Venezuela’s socialist President Nicolas Maduro, whose two re-elections have been disputed by Washington, leading to oil sanctions on the OPEC nation.
Iran’s oil production has been the target of successive waves of sanctions, and during Trump’s first term, oil exports from the third-largest producer in OPEC slowed to a trickle.
They have risen during President Joe Biden’s tenure as analysts say sanctions have been less rigorously enforced, Iran has succeeded in evading them, and as China has become a major buyer, according to industry trackers.
“Senator Rubio has a consistent and strong record as a hawk on Iran, Venezuela, and China,” said Bob McNally, president of Rapidan Energy, who was an energy adviser to former President George W. Bush.
Rubio will “zealously implement President-elect Trump’s plans to exert pressure on Iran’s crude exports, nearly all which go to China,” a trend that increased under Biden, said McNally.
Going hard on sanctions carries the risk of upsetting China, which could retaliate in several ways, including reducing the primacy of the dollar in oil trades, said Kevin Book, energy policy analyst at the nonpartisan ClearView Energy Partners.
Trump referred to China and risks to the dollar from sanctions in a September speech at the New York Economic Club.
Sanctions to achieve goals
Kimberly Donovan, a sanctions and anti-money laundering expert at the Atlantic Council, said Washington has strong existing sanctions which Rubio could push foreign partners to enforce. But sanctions are just one tool of national security and not always the best one, Donovan said.
“The next Trump administration will need to determine what their foreign policy objectives are and then decide if sanctions will help them achieve their goals,” Donovan said.
No one official heads implementation and enforcement of sanctions, and Rubio would have to serve at the pleasure of Trump. The Departments of State, Treasury and Commerce typically work on sanctions with counterparts in Europe and Asia.
The Trump administration will try to maintain those relations as it will likely seek to use authorities in the 2024 Stop Harboring Iranian Petroleum (SHIP) U.S. law, Book said. The law, which the Biden administration did not strictly enforce, allows the imposition of measures on foreign ports and refineries that process petroleum exported from Iran in violation of U.S. sanctions.
“Use of new authorities to go after those ports would require a great deal of new resolve from the incoming administration, but it could probably have the effect of curtailing some Iranian barrels,” said Book.
Relations with VenezuelaÂ
Rubio’s appointment means an improvement in relations between the U.S. and Venezuela is unlikely, said Luis Peche Arteaga of Caracas consulting firm Sala 58, adding that “it looks like more than anything like a confrontational approach.”
Jose Cardenas, a former adviser on Latin America policy under Bush, said top of the list for the Trump administration would be “oil sanctions and reviewing oil licenses allowing U.S. and foreign oil companies to do business with Maduro.”
Since 2022, Biden has issued licenses to some foreign partners and customers of Venezuelan state oil company PDVSA, including Chevron, Repsol, Eni and Reliance Industries, allowing oil deliveries to the U.S., Europe and India.
That helped Venezuela’s oil exports last month to jump to 950,000 barrels per day, a four-year high, despite the Biden administration reinstating broad restrictions on Caracas this year due to Venezuela’s lack of guarantees for a fair election.
“Revoking the oil licenses would send a powerful signal to not only Maduro, the opposition, the EU, and others that the U.S. is serious about a democratic transition taking place in Venezuela,” said Cardenas, now a Washington strategic consultant and lobbyist.
Here too, there will be limits on Rubio. Analysts have warned that tougher sanctions could prompt Venezuela, which has already created strategic alliances including with Iran to allocate its oil, to boycott Trump’s goal of repatriating thousands of illegal migrants.Â
