NEW YORK (Dispatches) -- The Biden administration is reviewing a 2018 sanctions waiver which allowed Afghanistan to purchase Iranian fuel, following the takeover of the country by the Taliban, the State Department has said.
A State Department spokesperson told Middle East Eye that the waiver policy put in place by the Trump administration “remains under active review” following the ousting of the previous government.
Earlier this month, Iran said it had resumed fuel exports to Afghanistan following a request by the country’s new leadership. Exports were paused earlier this year due to fighting but have spiked since the armed group seized power.
Heavily reliant on Iranian fuel to meet its energy needs, Kabul imported around 400,000 tonnes of fuel between 2020 and May 2021.
The Trump administration had granted the waiver to the previous Afghan government and U.S. ally in 2018.
Alex Zerden, who led the Treasury Department’s office at the U.S. embassy in Kabul from 2018-2019, said at the time the waiver was intended to “protect” Kabul even as Washington pursued its “maximum pressure campaign” against Tehran.
“There were real concerns about Iran sanctions harming Afghanistan’s economy and a waiver to import Iranian fuel was seen as crucial,” he said.
The Trump administration imposed sweeping economic sanctions against Iran in 2018 as part of an effort to pressure Tehran.
According to Zerden, the 2018 waiver was intended to allow fuel traders to bypass Iranian sanctions, but not Taliban sanctions.
“We haven’t seen any Afghan individuals or private businesses sanctioned yet for trading oil with Iran,” Zerden said.
“While the Taliban are already under sanctions, this could leave open the possibility that private individuals with no direct or indirect links to the Taliban would be subject to new sanctions,” he added.
An amendment to repeal a part of the waiver reached the House Foreign Relations Committee last month but was blocked by Democratic Congressman Gregory Meeks, the committee chairman.
According to Shatz, even if Washington wanted to enforce the sanctions, it could prove difficult. “We don’t have a lot of leverage with Iran and Afghanistan,” he said.
The fuel sales take place in cash at the Iranian-Afghan border, with some deals facilitated

by brokers in third countries. Most of the transactions occur through Afghanistan’s informal Halawa banking system.
“Enforcing violations of sanctions would be difficult because this occurs outside formal financial channels,” Zerden said.
The Biden administration’s review of the sanctions waiver comes as Iran’s new Foreign Minister Hussein Amir-Abdollahian has vowed that Tehran will take “mighty steps” to confront U.S. sanctions.
In recent months, the White House has struggled to respond to Iran’s fuel sales to countries such as Syria and Lebanon.
Last Thursday, the first fuel lorries carrying Iranian diesel in Lebanon were met with celebration and people throwing rice and rose petals into their path as they drove through the country.
“I’m not sure if the administration is interested in continuing the maximum pressure campaign, and that is why the Afghan waiver might stand,” Shatz said.
While sanctions cut Iran’s exports from 2.5 million barrels of oil a day in 2017 to less than 400,000 a day in 2020, the country has developed ways to sidestep sanctions and continues to sell oil.
According to the U.S. Energy Information Administration, Iran earned $30 bilion in net oil export revenues in 2019.
Shatz says if the Biden administration decides to end the waiver, one effect would be to cut off third parties involved in the purchase or sale of the fuel from the U.S. financial system.
“It would likely discourage businesspeople in the Persian Gulf from facilitating any transactions,” but individuals from countries like China or Russia could step in to fill the void, Shatz said.