October 1, 2009 / 9:57 PM / in 8 years

U.S. lawmakers vote to punish Iran's fuel suppliers

WASHINGTON (Reuters) - As Washington and Tehran began talks over Iran’s nuclear program, U.S. lawmakers approved legislation to bar foreign companies exporting gasoline to Iran from also delivering crude oil to America’s emergency petroleum stockpile.

Thursday’s action by the U.S. House of Representatives marks the first time lawmakers imposed economic sanctions on Iran since Tehran disclosed it was building another uranium enrichment plant and U.S. and Iranian officials met in Geneva, Switzerland to discuss the country’s nuclear program.

The sanctions, included in an energy and water programs spending bill, would prohibit the U.S. Energy Department from awarding contracts to companies to deliver oil to the U.S. Strategic Petroleum Reserve if the companies sell or ship gasoline to Iran.

The provision was sponsored by Senators Jon Kyl and Susan Collins and included in the final version of the compromise spending bill, which is expected to clear the U.S. Senate and then signed into law by President Barack Obama.

“Time is running out for Iran to give up its illegal nuclear weapons program,” the senators said in a statement.

Congress and the Obama administration are worried Iran’s uranium enrichment program will be used to develop weapons, while Tehran maintains it is for peaceful purposes to generate electricity.

To put pressure on Tehran to give up its nuclear program, Congress wants to cut off Iran’s gasoline supplies. Even though Iran holds some of the world’s biggest oil reserves, it still has to import 40 percent of its gasoline because of a lack of refining capacity.

“This provision sends a message to companies that put profits over security -- you can do business in our $13 trillion economy or Iran’s $250 billion economy,” Kyl and Collins said.

The sanctions would have no immediate effect as the U.S. petroleum reserve is just 2 million barrels short of its 727 million barrel capacity, which will be reached by January.

The emergency reserve was created by Congress in the mid 1970s after the Arab Oil embargo. It holds crude in underground storage caverns at four sites in Texas and Louisiana.

Editing by Marguerita Choy

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