Extra U.S. sanctions related to Iranian oil exports could come as a result of the war between Israel and Hamas, either from the Biden administration or Congress.
“The U.S. and other entities could increase sanctions and sanctions enforcement against Iranian oil exports, including pressure on shipments to China,” Benjamin Salisbury of Height Capital Markets wrote in a note.
Iranian security officials helped plan Hamas’s surprise attack on Israel, the Wall Street Journal reported, citing senior members of Hamas and Hezbollah, another Iran-backed militant group. A spokesman for Hamas told the BBC that the militant group had received support from its ally Iran for its attacks on Israel.
On Monday, the Israel Defense Forces said “there was no evidence yet of Iran’s role,” according to a report in The Times of Israel.
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Salisbury, Height’s director of research, said the Biden administration could act unilaterally, but that Congress could also require separate measures, such as legislation from Sens. Maggie Hassan, a New Hampshire Democrat, and Marco Rubio, a Florida Republican.
Their Stop Harboring Iranian Petroleum Act would sanction entities that facilitate refining and shipping of Iranian oil, including ship-to-ship transfers.
The conflict comes as the House of Representatives is effectively at a standstill until it elects a new speaker, following the ouster of Rep. Kevin McCarthy last week.
Lawmakers have said that the lack of a speaker could slow new aid to Israel.
“We have to get a speaker elected this week so we can get things to the floor like replenishing the Iron Dome,” House Foreign Affairs Committee Chairman Michael McCaul, a Texas Republican, said Sunday on CNN, referring to the Israeli air-defense system.
Analysts at Raymond James said the tensions in the Middle East could help speed the election of a new speaker.
“The spike in Middle East tensions following attacks on Israel may help resolve domestic U.S. uncertainty related to the ongoing House speaker battle and clarify the path forward for new defense funding,” they wrote Monday.
“This would ease pressures on defense equities
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and general market concerns over DC disfunction if the events over the weekend materially raise pressure on the House to return to regular order and resolve spending battles as foreign crises mount.”
House Republicans plan to hold a forum for speaker candidates at 5 p.m. Eastern on Tuesday, and hold an internal election for speaker on Wednesday morning. A formal vote for speaker would need to follow on the House floor, where it takes a majority of the chamber to elect a speaker.
Oil prices
CL00,
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climbed on Monday, as traders assessed implications for crude supplies after the surprise, deadly attack by Hamas on Israel over the weekend.
See Futures Movers.
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