Foundation for Defense of Democracies

The Foundation for Defense of Democracies promotes energy sanctions on Iran as part of a comprehensive strategy to pressure the Iranian regime to abandon its pursuit of nuclear weapons, support for terrorism, and brutal oppression of its own people.

Since 2008, FDD has waged economic warfare against the Iranian regime by providing research and analysis in support of the strongest sanctions ever imposed on Iran.  FDD continues its work to identify new sanctions against the Iranian regime and to ensure that existing sanctions are fully enforced. Policymakers and the American people must understand the effects of these measures, and consider additional restrictions if needed.

The goals of the project are:

• To put significant economic pressure on the Iranian regime by denying it revenue from its energy sector.
• To advance the policy discussion on imposing crippling sanctions against the Iranian regime.
• To provide education on the nature and gravity of the Iranian threat by highlighting the Iranian regime’s hostile and repressive policies.

FDD helped drive the debate over energy sanctions against the regime, which culminated in the passage of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. This legislation imposed the harshest U.S. sanctions yet against the regime.  FDD research was also used by European and Canadian officials as they enacted complementary international sanctions and filled loopholes in sanctions laws.

As a result of these sanctions, major suppliers of gasoline exited the Iranian market, gasoline shipments to Iran dropped by 90 percent, over $60 billion in energy-related investments in Iran have been terminated or frozen, and scores of international energy, insurance, financial, and industrial companies have left Iran.  Iran is estimated to lose $14 billion in annual oil sales revenue over the next five years. 

European energy sanctions already have cut technology transfers to and future investments in Iranian oil and natural gas, severely damaging Tehran's ability to sustain current production.  Iran has struggled to develop its natural gas reserves, which are valued at $4.4 trillion, and which would be source of enormous political and economic leverage if it could successfully distribute its natural gas through pipelines and liquefy its natural gas for sale to European and Asian markets.

The Iranian government also has embarked on a costly subsidy reduction program to reduce its dependence on refined petroleum imports, which, if implemented effectively, may have long-term economic benefits but, in the short term, has exacerbated its already double-digit inflation and unemployment rates.  These sanctions have broadened opposition to the regime beyond the upper middle class to the Iranian working class whose support is critical to the regime.

The next logical step in an escalating strategy of energy sanctions is to target Iranian crude oil sales, specifically Iran’s ability to monetize its daily exports of 2.3 million barrels. Since these oil exports represent between 50% and 75% of the Iranian government budget, and 80% of export earnings, sanctions must deny the Iranian regime this critical source of hard currency.