Senate Hearing Questions US Sanctions Policy on Russia and Iran

(WASHINGTON, DC) – A United States Senate hearing has highlighted sharp disagreements over sanctions policy on Russian and Iranian oil, with Senator Chris Coons questioning whether recent decisions risk benefiting adversaries and undermining support for Ukraine.

Speaking during a Senate Appropriations Committee hearing, Coons thanked Chairman Hagerty and Ranking Member Reid before outlining three areas of concern, including sanctions, community development financial institutions and tax filing policy. He noted that the United States is around seven weeks into a conflict involving Iran and asked Treasury Secretary Scott Bessent to assess how much Iran has gained through sanctions relief since the war began. Coons cited estimates of $14 billion.

He contrasted this figure with the $1.7 billion associated with the Obama era Iran deal, previously criticised by Donald Trump, and argued that allowing an adversary to gain financial resources during wartime is a strategic error. He said it was concerning that countries benefiting from sanctions relief include US adversaries.

Coons stated that Russia has profited significantly from the conflict, noting that oil and gas prices have risen by nearly 50 percent since February. He added that the Treasury had lifted sanctions on Russian oil, which he said provided an additional $150 million per day in revenue. According to Coons, these funds are being used both in the war against Ukraine and to support Iran with drones and intelligence.

Summarising his position, Coons said he found it difficult to justify continued sanctions relief for Russia and Iran. He noted that the Treasury had indicated it would not extend such relief but reversed the decision the following day, and asked for an explanation.

Bessent rejected the $14 billion figure, describing it as unsubstantiated and stating he would welcome further discussion on the matter. When asked whether Iran and Russia had received significant additional revenue due to sanctions relief, he said he disagreed with both assertions.

Defending the policy, Bessent pointed to global oil supply concerns, referencing the Strait of Hormuz. He said the Treasury had helped ensure that more than 250 million barrels of oil were available on the market. He argued that without this intervention, prices could have risen to $150 per barrel instead of approximately $100. He added that even if Russia sold oil at a discount, overall revenue effects needed to be considered in the context of global supply and price stability, and said the approach had benefited American consumers.

Coons responded that consumers in Delaware were still paying around $4 per gallon for fuel and said there had not been a significant reduction in prices. He reiterated his view that Russia and Iran had benefited from sanctions relief and expressed concern over the reversal of the earlier decision. He stated that “we shouldn’t be funding Putin’s war machine”.

Bessent said the decision to extend sanctions relief was taken during World Bank and International Monetary Fund meetings after requests from more than ten vulnerable countries reliant on energy supplies. He said the extension was limited to 30 days.

Coons noted that even a short extension could generate substantial revenue, estimating $4.5 billion for Russia. He then moved to questions on funding for community development financial institutions, highlighting bipartisan support for the programme and its role in supporting housing. He expressed concern over proposed cuts of more than $200 million, or over 60 percent.

Bessent replied that funding levels were set at $280 million and said he supported a new $100 million rural programme. He suggested parts of the initiative had become politicised.

In a final line of questioning, Coons raised concerns about the closure of the direct file tax system. He noted that more than 300,000 taxpayers had used the service, saving an average of $160 and receiving high approval ratings. He added that many Americans spend around $270 and 13 hours filing taxes through paid services.

Bessent said the programme was not free when accounting for public costs, estimating $138 per user, or $72 million overall. He pointed to an alternative public private system used by more than three million people and noted that over 60 percent of direct file users did not complete their applications.