Legislation pushing Joe Biden to ratchet up sanctions on Iranian crude oil is on track to become law as soon as this week. But don’t expect the president to fully use his new powers any time soon.

The measure was passed by the US House of Representatives over the weekend as a response to Iran’s attack on Israel earlier this month. On paper, at least, they promise to broaden the scope of restrictions on Iran’s exports of crude by extending coverage to foreign ports, vessels, and refineries that knowingly engage in the trade.

But oil market analysts say Biden will be loathe to make any moves that could increase the price of crude or the gasoline that US motorists buy at the pump. The president is likely to take advantage of the waiver authority built into the sanctions and avoid stringent enforcement, according to policy experts.

The situation to some extent mirrors that faced by the Biden administration with Russia and its invasion in Ukraine. Although the White House has imposed sanctions on Russia, it has tried to limit the country’s revenues while allowing its oil exports to keep flowing, so as not to squeeze global supplies and stoke inflation, a vital domestic consideration for the president in an election year. The administration also permitted Venezuelan oil to continue flowing last week even as it renewed sanctions aimed at President Nicolas Maduro.

“Oil traders are nonchalant because they know Biden will certainly sign whatever waivers are necessary to keep Iranian oil flowing into the market just as he is keeping Russian barrels flowing into the market,” said Jim Lucier, managing director at Capital Alpha Partners, a Washington-based research group. 

The White House National Security Council declined to comment on the sanctions. The administration is still analyzing the legislation, but no impact on oil markets is expected before the fall, a person familiar with the matter said. 

The oil market is particularly sensitive right now to the potential for further constraints. Brent crude prices exceeded $92 a barrel earlier in April, their highest in almost six months, amid strong global demand and ongoing production cuts by OPEC and its allies.

If implemented and enforced, the new sanctions could add as much as $8.40 to global prices, according to ClearView Energy Partners, a Washington-based consulting firm.

That would be bad news for Biden, who has already tapped the nation’s Strategic Petroleum Reserve after the cost of domestic fuel spiked higher in 2022. While US gasoline prices are still some way off the levels seen then, they have advanced this year, with peak driving season still to come.

The latest sanctions are part of a foreign aid package slated for Senate passage later this week. They include provisions to eliminate China’s use of sanctioned Iranian oil, effectively clarifying powers that already exist. About 80% of Iran’s roughly 1.5 million barrels per day of exports go to China, to be processed by small independent “teapot” refineries, according to a report by the House Financial Services Committee.

The legislation would expand the definition of a “significant financial transaction” under existing US sanctions to include transactions of any size made between Chinese and Iranian financial institutions to purchase Iranian oil, according to a summary of the legislation by Bloomberg Government.

There is a “new element of risk” that the measure could be directed at ports, vessels and refineries that engage in the shipping, processing and other transactions involving Iranian crude oil, said Fernando Ferreira, director of Rapidan Energy Group’s geopolitical risk services. However, they’re also subject to a potential waiver, allowing Biden to make exemptions in cases where national security is deemed a concern.

“It is unlikely they will enforce this thing with gusto,” Ferreira said of the administration. “Maybe we see a small reduction in imports as a degree of caution.”

Still, sanctions waivers may become harder for Biden to defend if Iran and its proxies engage in more direct aggression toward Israel. 

“Using the waivers if Iran is continuing its regional aggression could be as politically damaging as high gasoline prices,” said Kevin Book, managing director of ClearView Energy Partners, a Washington-based consulting firm.