Senate Republican says oil sale may have violated law

“Vitol’s involvement in the SPR sale raises two serious questions,” Murkowski said in a statement. “The first is whether this administration violated its own sanctions against doing business with companies involved with Iran. The second, is why the administration is selling SPR oil – at a discount – to speculators at all.”

The Energy Department defended its decision to approve the sale, noting that it required the company to confirm it was not trading with Iran.

"We look forward to reviewing Senator Murkowski’s letter when we receive it,” DOE spokesman Damien LaVera said in a statement. “Prior to the completion of the purchasing agreement, we reviewed the deal to confirm that Vitol is not engaged in activities that would result in sanctions, including under the Iran Sanctions Act. We are committed to implementing the law and believe we have done so in this case.”

Vitol has said it is in compliance with U.S. laws regarding economic sanctions on Iran.

Murkowski said she is drafting a letter to President Obama asking him to explain his justification for the SPR sale to Vitol. Robert Dillon, a spokesman for Murkowski, said the lawmaker would send the letter either Wednesday or Thursday.

“The administration needs to clear up lingering questions about whether Vitol was an eligible bidder despite the company’s well-known ties to a country that has repeatedly called for the destruction of the United States and its allies,” Murkowski said.

“Vitol insists that it’s no longer doing business with Iran, yet media reports suggest otherwise. If Vitol is doing business with Iran, directly or indirectly, the administration needs to revisit whether Vitol was an appropriate and lawful purchaser of SPR oil.”

Dillon questioned Tuesday whether the administration adequately vetted Vitol before approving the SPR sale.

“There seems to be a lack of due diligence on behalf of the administration here,” he said.

The Energy Department said earlier this month that it had secured 28 contracts with 15 companies to sell about 30 million barrels of oil from the U.S. strategic petroleum reserves. President Obama authorized the sale – the largest since the strategic stockpile was established in the 1970s – last month as part of an international effort to make up for supply losses resulting from the unrest in Libya.

Vitol, which is headquartered in the Netherlands and Switzerland, won two contracts for a total of 4 million barrels of oil from the strategic reserve.

Republicans, including Murkowski, roundly criticized Obama’s decision to hold an SPR sale as a ploy aimed at relieving political pressure on the White House at a time of high gas prices.

“From the beginning, the administration’s decision to sell 30 million barrels of oil from our emergency stockpile appeared to be motivated by more politics than policy – now it appears there may be legal questions related to the sale as well,” Murkowski said in Tuesday’s statement.

This story was updated at 6:06 p.m.