From Sanctions to Sponsorship: How Biden Funded Iran’s Comeback

 

                                                           Source: The Economist

The Biden administration's failure to enforce sanctions effectively made Iran wealthier, turning a rogue regime into a well-funded military threat—proof that weak diplomacy is worse than no diplomacy at all. Under Biden's watch, Iran’s oil revenues surged, its proxies gained power, and America lost its most effective deterrent—sanctions. This isn’t diplomacy; it is a costly blunder that could lead to war.

Sanctions have a funny way of turning into boomerangs when poorly executed, and it seems the Biden administration is discovering this the hard way. The sanctions intended to corral Iran’s ambitions have, instead, unraveled into a financial playground, allowing Iran to rake in billions of dollars, fueling proxy conflicts across the Middle East. When the purse strings loosen, missiles follow.

During Donald Trump’s tenure, America’s sanctions against Iran operated with a crushing intensity—oil revenues fell dramatically, from $65 billion in 2018 to just $16 billion by 2020. The "maximum pressure" approach was not merely a slogan; it was a financial stranglehold, and Iran felt it in every avenue of its economy. This was not about brinkmanship—it was about applying leverage that would cripple Iran’s capabilities to fund terror networks such as Hezbollah and the Houthis. Yet, once Biden took over, those painstaking efforts began to fade away like the last echoes of a storm. Iran's oil revenues rebounded, hitting $54 billion in 2022 and $53 billion in 2023, giving Tehran the leverage it had lost under the previous administration. The Biden administration admitted this stark reality—Iran's enrichment, both nuclear and financial, surged during its tenure, something that senior fellow Richard Goldberg called "totally insane".

What changed? Unlike the Trump administration, which enforced both direct and secondary sanctions without hesitation, Biden's administration has shown a distinct reluctance to apply the same rigor. The reasons are manifold—there was the aim of reviving the nuclear deal, and then the desire to keep global oil prices stable in the wake of Russia’s invasion of Ukraine. Biden’s calculus seemed to prioritize diplomacy and economic stability over robust enforcement. Yet, one can only question how effective diplomacy is when your counterpart is flush with cash and emboldened by your unwillingness to hit where it hurts most—its finances.

Recent reports indicate that Iran is currently moving 1.8 million barrels of oil per day, mostly to China, generating upwards of $70 billion annually. Biden’s administration not only failed to stop these activities but also looked the other way on the smuggling and sophisticated network of front companies that facilitated this revenue stream. This undermined the efficacy of financial deterrents and brought Beijing and Tehran closer, allowing Iran to bolster its military capacity while extending its influence through proxies across the region.

The most glaring example of this policy failure unfolded recently, as Iran unleashed over 180 missiles on Israel. In response, Biden’s answer has been an expansion of sanctions on Iran’s oil industry. But expanding sanctions now feels akin to closing the barn door after the horses have bolted. The fact is, the infrastructure to funnel oil revenues is already entrenched, involving banks from Hong Kong to the Gulf that unwittingly handle Iranian money. China’s participation, the Gulf's involvement, and a tepid response from American allies in the region show just how complex and formidable this sanctions evasion web has become.

The price for allowing these cracks in the sanctions regime to develop is steep. Not only has Iran financially rebounded, but it has also capitalized on America's lack of consistent resolve. Tehran is armed, its proxies are active, and the Biden administration now finds itself in a precarious position where financial deterrence has been eroded to such an extent that military deterrence is increasingly the only option left on the table. This leads to a dangerous path where the likelihood of military engagement—whether directly or indirectly—becomes far more probable.

Just recently, the Biden administration deployed US troops to Israel to support its defense systems, essentially rubber-stamping Netanyahu’s plans to target Iranian military infrastructure. Biden’s call with Netanyahu, and the subsequent promise of boots on the ground, signal that the US is willing to take on a much more direct role in what is unfolding in the region. There’s little ambiguity left; the war drumbeats are growing louder, and Iran is squarely in the crosshairs, with US troops now potential targets in the region.

Critics might ask, why risk war with Iran now? The answer may not lie just in nuclear ambitions but also in geopolitical realities involving Russia and China. Iran has become an increasingly important ally to Russia, especially as Moscow faces Western sanctions over its aggression in Ukraine. Tehran supplies drones and other critical resources to aid Russia’s war effort, positioning itself as a crucial player in a broader anti-Western axis. Biden’s administration may see confrontation with Iran as a way to weaken not just Tehran, but also its alignment with Moscow—a new "axis of evil" as some US strategists put it.

In the end, Biden’s approach towards Iran’s sanctions appears riddled with inconsistencies and, quite frankly, a lack of foresight. The decision to ease up on enforcement was ostensibly intended to bring Iran back to the negotiating table and stabilize global oil prices. Instead, what the world has seen is an emboldened Iran that remains a key player in the conflicts stretching from Gaza to Ukraine, with ample financial resources to sustain its campaigns of influence and violence.

Iran’s financial rebound is a testament to what happens when half-measures replace a determined strategy. Without the pressure of sanctions that were properly enforced, Iran filled its coffers while America fumbled for diplomatic "options." The Biden administration, by choosing not to fully leverage the economic tools at its disposal, inadvertently left the door open for escalation. Now, with sanctions weakened and Tehran stronger, America has but one tool left in its belt: military intervention.

It’s a stark and dangerous pivot from sanctions to soldiers, from deterrence to destruction. The old proverb says, "A stitch in time saves nine," but Biden’s missed stitches now mean the Middle East fabric is unraveling fast. And here we are, left only with the mending of missiles. If Biden’s plan was to drive us to the brink of a military conflict, well, one could say: mission accomplished.