Hossein Shamkhani’s oil export business should be a cautionary tale. The Biden administration’s permissive policy provided him an opportunity to expand operations. Since January 2021, these traders have sold 1.75 billion barrels of Iranian oil. Assuming that Iran sold its oil at a 15% discount to the Brent price, it still amassed $122 billion.

Indeed, Tehran’s average daily oil exports have increased throughout Biden’s presidency. On average, Iran exported 948,000 barrels per day in 2020. In the first two years of Biden’s presidency, this rose to 1.14 million barrels per day and then jumped to more than 1.4 million barrels per day in 2023. During the first eight months of 2024, it has increased to over 1.6 million barrels per day. Tehran’s average daily export in 2024 is now 77%, which is more than what it was in 2020 when former President Donald Trump was in office.

Iran sold more than 95% of this oil to China, though Syria received perhaps 100,000 barrels per day on average. Much of the rest was sent to the United Arab Emirates, most likely for tanker-to-tanker transfer operations to disguise its origins as the oil moved onward.

The revenue has helped Tehran invest in both domestic oppression and foreign aggression. Domestically, the regime cracked down on the “Woman, Life, Freedom” protests in 2022, and regionally, it helped fund “Axis of Resistance” proxies in Yemen, Iraq, Syria, Lebanon, and Gaza, facilitating Hamas’s Oct. 7 terrorist attack, militia attacks on U.S. forces in Iraq and Syria, and Houthi attacks on shipping.

In April, Congress passed the Stop Harboring Iranian Petroleum Act to curb Tehran’s oil exports by targeting entities involved in the illicit transfer of Iranian oil, such as port and tanker operators. Yet, enforcement matters. Five months later, Tehran’s oil exports have only increased following Biden’s signing of the SHIP Act.

Clearly, the Biden administration’s designation of front companies and smugglers does not suffice. While the administration has recently been more aggressive in targeting vessels transferring Iranian oil, it has yet to target companies with significant international footprints, such as the ports in China and refineries that transfer and use Iranian oil. Targeting these companies will impose significant costs, which may convince Beijing to reduce the import of Iranian oil. China has the option to replace Iranian oil with crude oil from other countries, although at a higher price.

Targeting Chinese companies will come at a high political and diplomatic cost and will likely lead Beijing to impose its own countermeasures. Still, regaining the lost economic leverage over a pillar of the Axis of Tyranny and Washington’s greatest foe in the Middle East is worth the price.

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Targeting only shadow players is similar to whitewashing a house infested with termites. It may look good for a moment, but it will not address the root problem.

Saeed Ghasseminejad, Ph.D., is a senior Iran and financial economics advisor at FDD specializing in Iran’s economy and financial markets, sanctions, and illicit finance. Follow him on X: @SGhasseminejad.