Defense Bill Imposes Iranian Oil Sanctions Potentially Affecting Shipping Companies

The U.S. Government maintains a variety of trade sanctions on specific Iranian related activities and specially designated Iranian nationals. In 2010, Congress expanded those sanctions to encompass exports of petroleum products to Iran and participation in the Iranian oil industry. Seven companies were sanctioned in May 2011 in connection with the supply of refined petroleum products to Iran. On December 3, 2011, President Obama signed into law the National Defense Authorization Act for Fiscal Year 2012 which contains a provision portending sanctions on companies participating in the export of Iranian crude oil. Under the law, the President must find that a "sufficient supply of petroleum and petroleum products" remain available to purchasers of Iranian oil if sanctions are imposed. The earliest sanctions could be imposed is 180 days after enactment, or about June 30, 2012, if the President makes the requisite determinations.