Here, sources about the relations between Iran and Venezuela are collected and commented.
Venezuela to export gasoline to Iran
July 2009,
https://edition.cnn.com/2009/WORLD/americas/09/07/iran.venezuela.gasoline/index.html
https://edition.cnn.com/2009/WORLD/americas/09/07/iran.venezuela.gasoline/index.html
"Iran produces 60 percent of its domestic gasoline demand and imports the remaining 40 percent, Press TV reported. Despite having large oil reserves, Iran lacks the refining capacity to cover all of its internal gasoline consumption."
Now, as Venezuala is strangulated by the internal and external imperial thugs and sea pirates and has become unable to satisfy the domestic demand for fuel, Iran is able to help out with gasoline supply.
Tuesday, 15 September 2020 10:37 AM [ Last Update: Friday, 18 September 2020 6:21 AM ]
https://www.presstv.com/Detail/2020/09/15/634143/Iran-condensate-ship-Venezuela-US-sanctions-supermarket
A worker for the Venezuelan state oil company PDVSA waves Iranian and Venezuelan flags as the Iranian-flagged oil tanker Fortune docks at the El Palito refinery in Puerto Cabello, on May 25, 2020.The first Iranian condensate cargo for Venezuela has been unloaded at the South American country’s port of Puerto Jose, a report says.
The ship on Saturday started discharging about 2 million barrels of South Pars condensate which the state oil company Petroleos de Venezuela SA is thought to blend with Venezuela’s tar-like crude in order to prop up production in the Orinoco oil belt, the financial news provider said.
Iran has already shipped several cargoes of gasoline to Venezuela, but this is the first condensate trade between the two countries.
Most importantly, the shipment is apparently the first to reach Venezuela since Iran supplied 1.5 million barrels of gasoline and diesel fuel to the country in May and June despite US threats to stop them.
Last month, the US government went on a full-throttle propaganda campaign, claiming that it had seized 1.116 million barrels of Iranian fuel because it was bound for Venezuela.
Iran, however, put down its foot to assert that neither the ships were Iranian nor their owners or their cargo had any connection to the Islamic Republic.
Owners of cargoes carrying Iranian fuel challenge US loot in courtThe owners of four cargoes carrying Iranian fuel that was looted in high seas by the United States last month have mounted a legal challenge to reclaim them, a report says.
When the New York Times first reported the seizure of the four cargoes in August, the newspaper headlined it as a “diplomatic doubleheader” which blocked Iran and Venezuela from evading American economic sanctions.
Iranian officials brushed aside the claim, with Iran’s Ambassador to Venezuela Hojjat Soltani saying the report was an “act of psychological warfare perpetrated by the US propaganda machine” trying to compensate for the Trump administration’s “humiliation and defeat by Iran using false propaganda.”
“The United States is seeking to contrive a victory for itself. Neither did the ships nor the cargo belong to Iran,” Minister of Petroleum Bijan Zangeneh told reporters in Tehran.
A legal challenge put up by the owners of the cargoes in the US last week appeared to confirm Iran’s contention.
According to a filing with the US District Court for the District of Columbia last Tuesday, "at the time they were seized, the Defendant Properties were destined for Trinidad for sale to customers in Peru and Colombia."
United Arab Emirates-based Mobin International Limited said it was the owner of the cargo aboard the Bella and Bering tankers, UK-registered Oman Fuel said it owned the cargo aboard the Pandi and Luna tankers, and Oman-registered Sohar Fuel said it part-owned the cargo aboard the Luna.
The companies said they had sold the cargoes onwards to UAE-based Citi Energy FZC, but payment was due upon delivery, which was disrupted by the seizure, Reuters reported.
The legal challenge and the report of Iranian condensate cargo having reached Venezuela deal another blow to Washington’s efforts to block trade between Iran and Venezuela – both subject to the most aggressive American sanctions.
In June, Iran sent a cargo of food to Venezuela to supply the South American nation’s first Iranian supermarket.
Venezuelans praise Iran’s first supermarket in Latin AmericaThe store is equipped with a kind of high-tech COVID-19 shield.
Covering an area of 20,000 square meters, the store is selling more than 2,500 Iranian items including foodstuff, clothing, detergents, plastic, disposable products, nuts, and even tractors.
The store ushered in a new era of cooperation between Caracas and Tehran, hailed by political observers as a step in breaking the paradigm of US power to subjugate sovereign countries.
Iran, Venezuela Increase Ties Amid U.S. Sanctions
By Alex Yacoubian Updated: October 9, 2020 Original: May 27, 2020
https://iranprimer.usip.org/index.php/blog/2020/may/27/iran-venezuela-increase-ties-under-us-sanctions
Iran and Venezuela have formed a strategic partnership to circumvent punitive U.S. sanctions imposed on both countries by the Trump administration. In October 2019, Iranian President Hassan Rouhani commended Venezuela’s “praiseworthy” resistance to U.S. pressure. “All their [U.S.] conspiracies against us have failed,” Rouhani said in a meeting with Venezuelan President Nicolas Maduro on the sidelines of the Non-Aligned Movement Summit in Azerbaijan. “Iran and Venezuela have always supported each other in all international and political arenas and will continue to do so.”
Iran-Venezuela ties developed in the 1960s—when the shah was still in power and Venezuela was a young democracy—with cooperation on oil. In 1960, they were two original members—along with Iraq, Kuwait and Saudi Arabia—of the Organization of Petroleum Exporting Countries (OPEC). But under both the monarchy and the theocracy, Iran’s relations with Venezuela were minimal until Hugo Chavez was elected president of Venezuela in 1999.
Khatami and Chavez (1999-2005)
Chavez first visited Iran in May 2001 with a high-level delegation of oil industry, economic and diplomatic officials. In a speech, the Venezuelan leader said that Iran and Venezuela shared a common resistance to U.S. “hegemony and imperialism” and vowed to increase trade and cooperation with Iran.
President Khatami and President Chavez in Tehran in 2004
During the presidency of Mohammad Khatami, Iran and Venezuela steadily increased trade and energy cooperation. In March 2005, President Khatami signed Iran’s first free trade agreement with Venezuela during a visit to Caracas. The agreement, worth $1 billion, included cooperation in mining, shipping, the marine trade, and the oil and gas industry.
At the end of Khatami’s term in 2005, Chavez presented him with the Golden Key of the City of Caracas, a sign of gratitude for Khatami’s efforts to promote ties between the two countries, during a visit to Venezuela.
Ahmadinejad and Chavez (2005-2013)
Both ideologues who often railed against the United States, Iranian President Mahmoud Ahmadinejad and Chavez became political and commercial allies. Between 2005 and 2012, the two countries signed more than 270 accords, including trade deals and agreements on construction projects, automobile production, energy initiatives and banking programs. The two leaders also became personal friends. They often referred to each other as “brothers,” and Chavez once called Ahmadinejad “the gladiator of anti-imperialist struggles.” In 2006, Ahmadinejad presented Chavez with the golden High Medallion of the Islamic Republic during a visit to Tehran.
President Ahmadinejad and President Chavez in Tehran in 2009
Chavez supported Iran’s nuclear program and development of peaceful nuclear technology as a “legitimate right.” In September 2008, Chavez announced that Venezuela was “interested in developing nuclear energy, for peaceful ends of course.” In November 2008, Iran and Venezuela signed a science and technology agreement formalizing cooperation on nuclear technology. In September 2009, Venezuelan Mining Minister Rodolfo Sanz said that Iranian experts were helping Venezuela conduct geological surveys to locate uranium deposits.
Cooperation in the oil and gas industry increased during the Ahmadinejad years. In 2009, Iran and Venezuela establisheda binational development bank in Caracas with a $200 million investment to support joint economic, industrial and mining projects. Later that year, the countries established a joint oil company and agreed to invest $760 million in each other’s energy sectors.
Rouhani and Maduro (2013-Present)
Chavez died in office in 2013 and was replaced by his Vice President Nicolas Maduro. Ties between Iran and Venezuela diminished. President Rouhani did not initially give priority to relations with Latin America. But in June 2015, the two countries signed six agreements in the economic, financial, technological and scientific fields. In August 2016, Iranian Foreign Minister Mohammad Javad Zarif met with President Maduro in Caracas and vowed to increase economic cooperation.
President Rouhani and President Maduro in Tehran in 2015
Relations increased after the United States reimposed sanctions on Iran in November 2018. In April 2019, Iran’s Mahan Air resumed commercial flights between Tehran and Caracas. Later that year, Iran and Venezuela signed new scientific and technological agreements for cooperation in education, nanotechnology, biotechnology and engineering.
In 2020, Tehran and Caracas boosted cooperation in the oil and gas field to circumvent U.S. sanctions. On April 23, Venezuela announced that it had received materials from Iran to help restart the Cardon refinery, which could produce up to 310,000 barrels of gasoline per day. Planes operated by Iran’s Mahan Air reportedly delivered catalysts, which are chemicals needed to produce gasoline, to Las Piedras airport on the Paraguana peninsula in western Venezuela, where the refinery is located. The United States accused Iran of accepting payment in gold bars to help rebuild Venezuela’s ailing oil industry.
Iran denied the U.S. charge as a “baseless” rumor. “Iran has never received such a consignment,” said Hojattolah Soltani, Iran’s ambassador to Venezuela. He also rejected claims that Iranian experts were helping rebuild Venezuelan refineries.
In May, Venezuela’s refining capabilities reportedly increased from 110,00 barrels per day (bpd) to about 215,000 bpd after the arrival of the spare parts from Iran.
Iranian Fuel Shipment
In early May 2020, five Iranian tankers – the Clavel, Faxon, Forest, Fortune and Petunia – departed from a refinery near Bandar Abbas on the Persian Gulf coast to deliver 1.53 million barrels of gasoline, worth at least $45.5 million, to Venezuela. It was the first shipment of Iranian gasoline to Venezuela, according to Hojattolah Soltani, Iran’s ambassador to Venezuela. Venezuela has the world’s largest oil reserves. But years of government mismanagement and U.S. sanctions on its oil industry have left its refineries in disrepair. The country faced gas shortages and widespread blackouts as a result. “You have two pariah states finding that they are able to exchange things they need for things they have,” said Elliott Abrams, U.S. special representative to Venezuela.
The Venezuelan Air Force released a video thanking Iran for sending fuel and standing up to the “imperialist” United States
The United States condemned the shipment of fuel and deployed four warships and a patrol aircraft to the Caribbean on May 16. Admiral Craig Faller, head of the U.S. Southern Command in the Caribbean, accused Iran of attempting to “gain a positional advantage in our neighborhood as a way to counter U.S. interests.” The United States said that it was weighing options about how to respond.
A crew member of the Forest waived an Iranian and a Venezuelan flag
On May 17, Iran summoned the Swiss ambassador in Tehran to relay a “serious warning” to Washington not to interfere with the fuel shipment. Foreign Minister Zarif said that Iran “reserves its right to take all appropriate and necessary measures and decisive action ... to secure its legitimate rights and interests against such bullying policies and unlawful practices.”
Between May 23 and June 2, the Clavel, Faxon, Forest, Fortune and Petunia reached ports in Venezuela. The tankers were escorted by the Venezuelan military once they reached the Caribbean. The United States did not interfere with the fuel shipments despite prior warnings.
On June 24, the United States sanctioned five Iranian ship captains who had delivered 1.5 million barrels of gasoline to Venezuela. The captains of the Clavel, Faxon, Forest, Fortune and Petunia were employed by the U.S.-sanctioned Islamic Republic of Iran Shipping Lines and National Iranian Tanker Company. "As a result of today’s sanctions, these captains' assets will be blocked," Secretary of State Mike Pompeo said in a statement. "Their careers and prospects will suffer from this designation. Mariners who are considering work with Iran and Venezuela should understand that aiding these oppressive regimes is simply not worth the risk."
On August 14, the Trump administration seized the cargo of four oil tankers transporting 1.1 million barrels of gasoline to Venezuela. The Bella, Bering, Pandi and Luna were reportedly en route to Houston after the United States threatened the ship owners, insurers and captains with sanctions if they did not hand over their cargo. But Iranian oil shipments to Venezuela continued. A three-ship flotilla carrying more than 1 million barrels of gasoline were scheduled to arrive in Venezuela at the end of September.
The following is a timeline of Iran’s fuel shipment.
Timeline of Iran’s Fuel Shipment to Venezuela in 2020
Apr. 23: Erling Rojas, the vice minister for refining and petrochemicals in Venezuela’s Oil Ministry, announced that Venezuela had received materials from Iran to help restart its Cardon refinery, which could produce up to 310,000 barrels of gasoline per day. Rojas said that Iran had shipped catalysts, which are chemicals needed to refine oil into gasoline. Planes operated by Iran’s Mahan Air had reportedly conducted a series of flights from Tehran to an airport near the refinery.
Apr. 30: The United States charged that Iran was accepting payment in gold in exchange for helping Venezuela rebuild it ailing oil industry. “Those planes that are coming in from Iran that are bringing things for the oil industry are returning with the payments for those things: gold,” said Elliott Abrams, the U.S. Special Representative for Venezuela. U.S. officials reported that nine tons of gold, equal to about $500 million, left Venezuela on Tehran-bound jets during the month of April. Mahan Air had allegedly made more than six flights to Venezuela since April 23.
May 11: Hojattolah Soltani, Iran’s Ambassador to Venezuela, rejected U.S. claims that Tehran was accepting gold bars from Venezuela as payment for oil products, calling them “baseless” rumors. “Iran has never received such a consignment,” Soltani said. “To date, the governments of the two countries have held talks on bilateral trade cooperation, but so far Iranian fuel has not entered Venezuela.”
May 13: The Clavel, an Iran-flagged medium tanker, traveled through the Suez Canal in route to Venezuela after loading gasoline at Iran’s Bandar Abbas port at the end of March, according to tracking data from maritime intelligence companies Refinitiv Eikon and Tanker Trackers. Four other Iran-flagged tankers were following the same path from Bandar Abbas into the Atlantic Ocean but had not listed their final destinations.
May 14: The United States said that it was weighing its responses to Iran’s fuel shipment to Venezuela. “It is not only unwelcome by the United States but it’s unwelcome by the region, and we’re looking at measures that can be taken,” one U.S. official told Reuters.
May 15: Iran’s Nour news agency, linked to the elite Revolutionary Guards, warned that Iran would respond to any U.S. move to stop the fuel shipment. “If the United States, just like pirates, intends to create insecurity on international waterways, it would be taking a dangerous risk and that will certainly not go without repercussion,” the media outlet said.
May 16: The United States deployed four warships and a patrol aircraft to the Caribbean.
May 17: Five tankers belonging to Iranian state-owned or state-linked companies were transporting around 1.5 million barrels of gasoline worth at least $45.5 million to Venezuela, according to the Associated Press. The vessels were reportedly loaded from the Persian Gulf Star Refinery near Bandar Abbas. The Clavel had originally listed its destination as Caracas on May 12, but two days later it appeared as “TO ORDER.” Another tanker, the Forest, logged its destination as “S. AMERICA TO ORDER.” The Faxon, the Fortune and the Petunia had not listed destinations but appeared on track to Venezuela.
Iranian Foreign Minister Mohammad Javad Zarif warned against “America's movements in deploying its navy to the Caribbean in order to intervene and create disruption in [the] transfer of Iran's fuel to Venezuela.” In a letter to U.N. Secretary General Antonio Guterres, Zarif said that Iran “reserves its right to take all appropriate and necessary measures and decisive action ... to secure its legitimate rights and interests against such bullying policies and unlawful practices.”
Iran summoned the Swiss ambassador in Tehran, who represents U.S. interests in the country, to communicate Iran’s “serious warning” not to interfere with its fuel shipment.
May 18: Tehran said that the United States would face a “decisive response” if it targeted Iran’s oil tankers. “The U.S. itself will have to suffer the repercussions that arise out of any unthinking measure [that it could take] against the Iranian vessels,” foreign ministry spokesman Abbas Mousavi said during a press briefing. “Free trade between independent countries is a legal act. What is illegal is robbery in the sea, which the U.S. is the leader of.”
May 20: The Venezuelan military said that it would escort the five Iranian tankers transporting fuel to the country. “When they enter our exclusive economic zone, they will be escorted by Bolivarian National Armed Forces boats and planes to welcome them in and thank the Iranian people for their solidarity and cooperation,” said Defense Minister Vladimir Padrino.
May 23: The Fortune, the first of five Iranian tankers, reached Venezuelan waters. It was carrying around 11 million gallons of gasoline. “Iran and Venezuela have always supported each other in times of difficulty,” Venezuelan Foreign Minister Jorge Arreaza tweeted. “Today, the first ship with gasoline arrives for our people.” There were no reports of interference by U.S. warships deployed to the region.
Earlier that day, President Rouhani had warned of retaliation if the United States interfered with the gasoline shipment. “If our tankers in the Caribbean or anywhere in the world face any problems caused by the Americans, they will face problems as well,” Rouhani said. “We hope the Americans will not make a mistake.”
May 25: The Fortune docked at a port connected to Venezuela’s El Palito refinery. Tareck El Aissami, Venezuela’s oil minister, called the Fortune “a symbol of the brotherhood and solidarity” between the two countries and thanked Iran for the shipment of “fuel, additives and spare parts.” The Forest, a second Iranian tanker, reached Venezuelan waters, according to Venezuelan state media.
May 27: The Forest docked at the country’s second-largest refinery, Cardon, in western Venezuela. The third Iranian tanker, the Petunia, arrived in Venezuelan waters. President Maduro said that he would announce a plan for distribution of the fuel in the coming days. "Now we will be able to go in phases toward a new normal in terms of gasoline supply," Maduro said.
U.S. officials said that two Liberian-flagged tankers—the Bering and the Bella—loaded with Iranian oil bound for Venezuela cancelled their deliveries due to the threat of U.S. sanctions. Liberia pulled the vessels’ accreditation after the U.S. State Department contacted the government.
The crew of the Forest celebrated with the Venezuelan military after docking
May 28: The Faxon, Iran's fourth tanker, docked at the Puerto la Cruz refinery on Venezuela’s eastern coast.
Secretary of Iran's Supreme National Security Council Ali Shamkhani praised the crews of Iran's oil tankers. He called them "national heroes" and said their actions spread Iran's influence around the world.
May 29: U.S. Special Representative to Venezuela Elliott Abrams warned foreign countries and companies that aiding Iran's fuel shipment to Venezuela could result in U.S. sanctions. Abrams said that it would be "a very dangerous transaction." He added that the United States had sent the warning to ship owners, ship captains, ship insurers and ports between Iran and Venezuela.
May 30: Iranian fuel began reaching gas pumps across Venezuela. President Maduro announced that 200 filling stations would sell fuel at international market prices, a break from country-wide subsidized gasoline. Venezuelans would still be able to purchase limited amounts of subsidized fuel at nine cents a gallon. "The time has come to move toward a new policy, toward a new normality, toward a new situation," Maduro said in a state TV broadcast.
June 1: Iran said that it was ready to ship additional fuel to Venezuela. "Iran practices its free trade rights with Venezuela, and we are ready to send more ships if Caracas demands more supplies from Iran," Foreign Ministry spokesman Abbas Mousavi said on state television.
June 2: The Clavel, Iran's fifth tanker, reached Venezuelan waters carrying 1.53 million barrels of gasoline. It was the last of five Iranian tankers set to deliver much-needed fuel to the country.
June 3: Venezuela said that it planned to import additional gasoline from Iran. "Tehran yesterday offered to supply Venezuela with more gasoline and refinery additives. President Maduro very likely will accept the offer because we need the fuel," a Venezuelan official reported.
June 8: Supreme Leader Ayatollah Ali Khamenei praised the crews of Iran's oil tankers that delivered fuel to Venezuela.
General Ali Jafarabadi, Commander of the Islamic Revolutionary Guards Corps' (IRGC) Aerospace Force Space Division, said that the homegrown "Noor" satellite that Iran had launched into orbit in April was used to track Iran's fuel shipment. "In the Atlantic Ocean, where access (to ships) is normally more difficult, monitoring the position of the oil tankers and the situation in their surroundings was put on the agenda of the Noor satellite, and was accomplished," Jafarabadi said in and interview with Tasnim News Agency.
June 10: General Hossein Salami, commander of the IRGC, said that Iran "imposed its will" on its enemies by shipping fuel to Venezuela. "By God’s grace, today we are witnessing the early and rapid decline of our archenemies, particularly the U.S., Salami said.
June 22: Ali Aqamohammadi, a member of Iran's Expediency Council, announced that the National Iranian Oil Refining and Distribution Company had received payment from Venezuela for the shipment of fuel delivered by five Iranian tankers. He added that the money was deposited in the country's treasury.
June 24: The United States announced sanctions on the Iranian captains of the the Clavel, Faxon, Forest, Fortune and Petunia. The mariners were employed by the U.S.-sanctioned Islamic Republic of Iran Shipping Lines and National Iranian Tanker Company. “The Treasury Department will target anyone who supports Iranian attempts to evade United States sanctions and who further enables their destabilizing behavior around the world,” said U.S. Treasury Secretary Steven T. Mnuchin. “The Iranian regime’s support to the authoritarian and corrupt regime in Venezuela is unacceptable, and the Administration will continue to use its authorities to disrupt it.”
July 1: U.S. prosecutors filed a civil-forfeiture complaint to seize four Iranian tankers carrying gasoline to Venezuela in violation of U.S. sanctions. "The profits from these activities support the IRGC’s full range of nefarious activities, including the proliferation of weapons of mass destruction and their means of delivery, support for terrorism, and a variety of human rights abuses, at home and abroad,” prosecutor Zia Faruqui said in the complaint. The prosecutors allege that the tankers listed in the complaint—the Bella, Bering, Pandi and Luna—were transporting 1.1 million barrels of gasoline that they obtained using discrete ship-to-ship transfers. The complaint alleged that Mahmoud Madanipour, an Iranian businessman linked to the IRGC, helped facilitate the fuel sale by forging documents about the tankers and their cargo.
August 14: The United States announced that it had seized the cargo of four oil tankers transporting 1.1 million barrels of gasoline to Venezuela. The Bella, Bering, Pandi and Luna were reportedly en route to Houston after the United States threatened the ship owners, insurers and captains with sanctions if they did not hand over their cargo. “The Justice Department today announced the successful disruption of a multimillion dollar fuel shipment by the Islamic Revolutionary Guard Corps (IRGC), a designated foreign terrorist organization, that was bound for Venezuela. These actions represent the government’s largest-ever seizure of fuel shipments from Iran,” the U.S. Justice Department said in a statement.
September 28: A Iranian tanker, Forest, entered Venezuelan waters carrying hundreds of thousands of barrels of petroleum products. The tanker was the first of three oil-carrying vessels scheduled to arrive in Venezuela within days of one another.
September 30: A second Iranian tanker, Fortune, arrived in Venezuela. The vessel carried 272,000 barrels of fuel for Venezuela's state-run oil and gas company. A third tanker, Faxon, was expected to arrive in Venezuela later in the week with 820,000 barrels of petroleum products.
October 3: The third and final vessel in an Iranian tanker flotilla arrived in Venezuela carrying 234,000 barrels of fuel.
October 9: An Iranian-flagged oil tanker, Master Honey, left Venezuela with 1.9 million barrels of heavy crude oil. The tanker was headed for the Persian Gulf, Reuters reported.
Timeline of Bilateral Relations
1960
September: OPEC was formed by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela to co-ordinate and unify petroleum policies.
2001
May: Chavez visited Iran for the first time. He said that he came to Tehran “to prepare the road for peace, justice, stability and progress for the 21st century.” Chavez commended Iran on its resistance to the United States and vowed to increase trade ties with the Islamic Republic.
2005
Mar. 12: Iran signed its first free trade agreement with Venezuela. During a visit to Caracas, President Khatami inked several accords, including cooperation on geological and mining projects, shipping and marine trade, and memoranda of understanding on oil, gas and petrochemistry. The agreements were worth a total of $1 billion. During the visit, Chavez presented Khatami with the Golden Key of the City of Caracas to thank him for expanding the relationship between the two countries, a sign of gratitude to honor Khatami’s efforts to increase ties between the two countries.
2006
July: President Hugo Chavez and his oil minister, Rafael Ramírez, visited Tehran and signed agreements for the joint production of nearly a dozen products, including a $4 billion investment in two Venezuelan energy projects by Iranian company Petropars Ltd. The two countries also launched the construction of a joint methanol facility with an annual capacity of 1.65 million tons on Iran’s Persian Gulf coast.
Iranian President Mahmoud Ahmadinejad praised Chavez as “the brother of the whole Iranian nation” and presented him with the golden High Medallion of the Islamic Republic. “We stand by Iran at every moment, in any situation,” Chavez said upon accepting the award. “If the U.S. succeeds in establishing its dominance there will be no future for humanity. Therefore, we should save humanity and end the American empire.”
A crowd flocked to see Chavez during a trip to Tehran
2007
Jan. 13: President Ahmadinejad met with President Chavez in Caracas to discuss strengthening trade ties. During the talks, Iran and Venezuela agreed to establish a $2 billion investment fund “with the aim of supporting joint economic, industrial and mining projects as well as speeding up the current projects.” Ahmadinejad and Chavez also agreed to press OPEC for output cuts to increase oil prices, which were at a 19-month low.
2008
November: Iran and Venezuela signed a “science and technology” agreement formalizing cooperation “in the field of nuclear technology.” The following week, Venezuela’s Ministry of Energy and Petroleum submitted a presentation to the International Atomic Energy Agency documenting the establishment of a “nuclear power program.”
2009
March: Iran and Venezuela established a binational development bank in Caracas, the Banco Internacional de Desarrollo. The bank, which was a subsidiary of the Export Development Bank of Iran, was funded at $200 million to support “joint economic, industrial and mining projects as well as speeding up the current projects,” according to Iranian state media.
April: Iranian Defense Minister Mostafa Mohammed Najjar met with Venezuelan officials in Caracas to discuss defense cooperation. It was the first visit by an Iranian defense minister to Venezuela since 1979 Iranian Revolution. The two countries reportedly shared sensitive information on their military developments and capabilities and agreed to joint training exercises.
Sept. 25: Venezuelan Mining Minister Rodolfo Sanz said that Iranian experts were helping his country conduct geological surveys to locate uranium deposits. Venezuela had an estimated 50,000 tons of un-mined uranium, which the United States feared could be used to help Iran develop a nuclear weapon.
October: Venezuelan First Secretary for Energy Affairs Louis Mayta announced that “Iran and Venezuela are establishing an oil company named Beniroug which allows us to make investments and activities [sic] in other countries, including Cuba, Sudan, China and Bolivia.” Iran agreed to pay for Venezuelan gasoline in the form of investments in Venezuela’s energy projects.
2010
Iran and Venezuela agreed to invest $760 million in each other’s energy sectors. Venezuela pledged to export 20,000 barrels of gasoline per day to Iran.
2012
January: President Ahmadinejad met with President Chavez in Caracas. The two leaders signed agreements in the areas of industry, science, technology and politics. They vowed to unite in resistance to the United States. “It's clear they are afraid of our development,” Ahmadinejad said. “Our weapon is logic. Our weapon is culture. Our weapons are human values.”
2013
Mar. 5: Hugo Chavez died after 14 years in office. Ahmadinejad attended his funeral in Caracas. He declared a national day of mourning in Iran and offered a personal tribute to the late president. “He is alive, as long as nations are alive and struggle for consolidating independence, justice and kindness,” Ahmadinejad wrote in a letter published by the semi-official Mehr News Agency. “I have no doubt that he will come back, and along with Christ the Savior, the heir to all saintly and perfect men, and will bring peace, justice and perfection for all.”
2015
Jan. 12: President Maduro met with President Rouhani in Tehran during his tour of OPEC countries. The two leaders pledged to work together to stabilize global oil prices. Maduro said that plummeting oil prices were the product of a “geopolitical war” with the United States.
Jun. 26: Iran and Venezuela inked six agreements in the economic, financial, technological and scientific fields. Venezuelan President Nicolas Maduro agreed to a $500 million credit line to fund joint investments and help improve supplies of goods “necessary for the Venezuelan people,” including drugs and surgical equipment.
Nov. 23: President Maduro met with President Rouhani in Tehran to discuss oil prices and trade ties. “Tehran is fully ready to expand scientific and educational cooperation with the Venezuelan part, to meet Venezuelans trade and industrial demands and to implement joint projects based on the previous agreements,” said Rouhani.
2016
Aug. 26: Iranian Foreign Minister Mohammad Javad Zarif met with President Maduro in Caracas. Zarif and Maduro vowed to increase trade between the two countries. Venezuela launched a special commission to push forward bilateral deals signed in 2015. “We are advancing in our bilateral cooperation as well as in matters of mutual interest for economic development ... we are going to create a new dynamism in Venezuela-Iran relations,” said President Maduro.
2019
April: Iran’s Mahan Air resumed commercial flights between Tehran and Caracas. Flights between the two capitals were halted in 2010.
Apr. 15: Secretary of State Mike Pompeo accused Iran of meddling in Venezuela. “Iranian money remains in South America being used for malign purposes, supporting Hezbollah, supporting transnational criminal organizations, supporting efforts at terrorism throughout the region,” Pompeo told the Voice of America.
November: Iran and Venezuela signed new “scientific and technological” agreements for cooperation in “education, nanotechnology, biotechnology and engineering, according to the Venezuelan government. Caracas did not provide additional details about the deal.
2020
Jan. 8: Venezuelan Defense Minister Vladimir Lopez condemned the U.S. killing of Iranian General Qassem Soleimani. “The Bolivarian Republic of Venezuela strongly condemns this terrorist act and I extend my heartfelt condolences to you and the people of Iran on behalf of the Venezuelan armed forces, the people of my country and all the commanders.” Lopez said in a phone call to Iranian Defense Minister Amir Hatami. “We will side with Iran to fight the (global) arrogance.”
June 8: Iran sent medical equipment to Venezuela to help stem the COVID-19 outbreak. "Right now, what we are receiving is different types of testing kits,” Venezuelan Planning Minister Ricardo Menendez said on state television.
June 21: The Golsan, an Iranian cargo ship transporting 23,000 tons of product, delivered food to Venezuela to stock the first Iranian supermarket in the country. The Iranian embassy in Caracas praised the delivery as "another success in friendly and fraternal relations between two countries."
Reignited Cooperation: Iran-Venezuela Relations Amid Crippling US Sanctions
Areeb Tariq June 2, 2020
http://sassi.org.pk/reignited-cooperation-iran-venezuela-relations-amid-crippling-us-sanctions/
Iran till this day is second only to Cuba as Venezuela’s top ally. Iran-Venezuela’s relations were minimal until 200 to say the least up until the point when in the same year, Hugo Chavez the then-President of Venezuela was captivated by the country’s then-President, Mahmoud Ahmadinejad. Soon Iran was among Venezuela’s top and most important ally and Iran reciprocated by playing an integral role in the Bolivian revolution. Venezuela soon saw presence of mosques and flights between Caracas and Tehran became much more frequent and were believed to carry suspicious cargo including arms. Ahmadinejad also made frequent trips to the Caracas and after the establishment of strong ties and diplomatic relations with President Chavez, threw Iran’s top proxy militia, the Hezbollah group at his disposal to be used however he deemed fit.
In May of 2009, evidence surfaced that linked Venezuela and Bolivia to Iran’s nuclear program. According to a confidential Israeli government report that was leaked to the associated press, the two countries that possess vast deposits of uranium were supplying Iran with the nuclear material. These speculations were denied by the Bolivian authorities and Venezuela refused to pass any comments. On the global front, both Latin American countries have enjoyed increasingly bettering relations with Iran and have shared similar anti-American sentiments on multiple forums and have made statements of the same nature, furthermore both the countries made public statements in favor of the Iranian nuclear program and enrichment activities. Chavez has remained adamant upon insisting that Iran has a legal right to its nuclear program, and stated that Venezuela respects Iran’s access to peaceful nuclear technologies. In July 2008 in Tehran, Venezuela, a leader of the Non-Aligned Movement (NAM) and served Latin America and the Caribbean at NAM ‘s 15th Ministerial. At that conference, in July 2008, the delegates released a statement “reaffirming that the options and decisions of states, including those of the Islamic Republic of Iran, in the area of peaceful use of nuclear technology and its fuel cycle policies must be respected.”
In recent years, Iran and Venezuela have also deepened their military partnership, moving towards agreements of mutual defense and military support which complement their nuclear cooperation. Like Tehran under Ahmadinejad, Caracas under Chavez has turned in its military growth plans to Russia and China for assistance, bringing Iran and Venezuela much together under a shared security umbrella. Furthermore, the countries have shown levels of cooperation on the oil and energy export sector to a certain degree. Venezuela, a country that is already strangled by the American sanctions have had Iran playing a detrimental role to keep the country’s economic wheel turning and face its security challenges at the same time. As armed soldiers in Caracas guard the last drops of fuel in the city and state-owned Petroleos de Venezuela SA seeks to maintain its operations, Tehran has recently started to deliver blending components used to manufacture gasoline, according to people affiliated with the matter. The Islamic Republic exports both personnel and oil processing machinery, and the countries have discussed bringing actual gasoline cargoes into Venezuela. The funding and cooperation arrive at a crucial moment. While the rest of the planet is dealing with a global supply surplus which has battered oil rates, Venezuela is running out of fuel fast. Last month, U.S. sanctions against Russian traders abruptly halted the nation ‘s key supplies already facing hyperinflation, food shortages, and coronavirus. Venezuela ‘s petroleum stocks are essential, since its small inventories of oil are rationed to both the military and medical and nutritional providers. Which leaves most Venezuelans — used to basically fueling up for free — charging sky-high black-market rates to have a little petrol in their tanks. In present day, despite the supply disruptions from Caracas, the U.S still intends to reduce Iran’s oil exports to zero. In late January, the U.S. administration prohibited the import of fuel from Nicolás Maduro’s Venezuelan regime, barely two months after it put an embargo on Iran’s oil exports. At the time, the White House issued waivers to eight nations, allowing them to continue buying fossil-fuel from Iran until April. A potential market increases ahead of U.S. mid-term elections blunted the change.
Since 2017, when the U.S. escalated financial sanctions on PDVSA, Venezuela has faced chronic gasoline shortages, but the situation has got worse after additional measures targeting Russian state oil giant Rosneft Oil Co PJSC subsidiaries. Rosneft Trading SA and TNK Trading International SA supplied PDVSA petrol and petrol components in exchange for crude oil cargoes.
In January, according to the group’s most recent reports, the Organization of the Petroleum Exporting Countries pumped 220,000 barrels a day more than the markets demand this year. However, in the week ending Feb. 2—when U.S. restrictions were imposed — Venezuelan oil shipments to the U.S. fell by a total of 242,000 barrels a day, the U.S. reports. Energy Information Management. It’s uncertain if the Venezuelan supplies diverted to the U.S. are being transferred elsewhere. According to satellite images obtained via the FleetMon website, dozens of tankers which normally ship crude and oil products are sitting idle near Venezuelan ports. Meanwhile, supplies from Canada and the US face bottlenecks in the pipeline. According to a survey by Scandinavian consultancy company Rystad Energy, U.S. refiners would have to spend a premium to offset Caracas’ heavy oil with alternatives—a expense that would shift on customers.
Petro-Diplomacy: Venezuela, Iran, and the U.S.
Iran till this day is second only to Cuba as Venezuela’s top ally. Iran-Venezuela’s relations were minimal until 200 to say the least up until the point when in the same year, Hugo Chavez the then-President of Venezuela was captivated by the country’s then-President, Mahmoud Ahmadinejad. Soon Iran was among Venezuela’s top and most important ally and Iran reciprocated by playing an integral role in the Bolivian revolution. Venezuela soon saw presence of mosques and flights between Caracas and Tehran became much more frequent and were believed to carry suspicious cargo including arms. Ahmadinejad also made frequent trips to the Caracas and after the establishment of strong ties and diplomatic relations with President Chavez, threw Iran’s top proxy militia, the Hezbollah group at his disposal to be used however he deemed fit.
In May of 2009, evidence surfaced that linked Venezuela and Bolivia to Iran’s nuclear program. According to a confidential Israeli government report that was leaked to the associated press, the two countries that possess vast deposits of uranium were supplying Iran with the nuclear material. These speculations were denied by the Bolivian authorities and Venezuela refused to pass any comments. On the global front, both Latin American countries have enjoyed increasingly bettering relations with Iran and have shared similar anti-American sentiments on multiple forums and have made statements of the same nature, furthermore both the countries made public statements in favor of the Iranian nuclear program and enrichment activities. Chavez has remained adamant upon insisting that Iran has a legal right to its nuclear program, and stated that Venezuela respects Iran’s access to peaceful nuclear technologies. In July 2008 in Tehran, Venezuela, a leader of the Non-Aligned Movement (NAM) and served Latin America and the Caribbean at NAM ‘s 15th Ministerial. At that conference, in July 2008, the delegates released a statement “reaffirming that the options and decisions of states, including those of the Islamic Republic of Iran, in the area of peaceful use of nuclear technology and its fuel cycle policies must be respected.”
In recent years, Iran and Venezuela have also deepened their military partnership, moving towards agreements of mutual defense and military support which complement their nuclear cooperation. Like Tehran under Ahmadinejad, Caracas under Chavez has turned in its military growth plans to Russia and China for assistance, bringing Iran and Venezuela much together under a shared security umbrella. Furthermore, the countries have shown levels of cooperation on the oil and energy export sector to a certain degree. Venezuela, a country that is already strangled by the American sanctions have had Iran playing a detrimental role to keep the country’s economic wheel turning and face its security challenges at the same time. As armed soldiers in Caracas guard the last drops of fuel in the city and state-owned Petroleos de Venezuela SA seeks to maintain its operations, Tehran has recently started to deliver blending components used to manufacture gasoline, according to people affiliated with the matter. The Islamic Republic exports both personnel and oil processing machinery, and the countries have discussed bringing actual gasoline cargoes into Venezuela. The funding and cooperation arrive at a crucial moment. While the rest of the planet is dealing with a global supply surplus which has battered oil rates, Venezuela is running out of fuel fast. Last month, U.S. sanctions against Russian traders abruptly halted the nation ‘s key supplies already facing hyperinflation, food shortages, and coronavirus. Venezuela ‘s petroleum stocks are essential, since its small inventories of oil are rationed to both the military and medical and nutritional providers. Which leaves most Venezuelans — used to basically fueling up for free — charging sky-high black-market rates to have a little petrol in their tanks. In present day, despite the supply disruptions from Caracas, the U.S still intends to reduce Iran’s oil exports to zero. In late January, the U.S. administration prohibited the import of fuel from Nicolás Maduro’s Venezuelan regime, barely two months after it put an embargo on Iran’s oil exports. At the time, the White House issued waivers to eight nations, allowing them to continue buying fossil-fuel from Iran until April. A potential market increases ahead of U.S. mid-term elections blunted the change.
Since 2017, when the U.S. escalated financial sanctions on PDVSA, Venezuela has faced chronic gasoline shortages, but the situation has got worse after additional measures targeting Russian state oil giant Rosneft Oil Co PJSC subsidiaries. Rosneft Trading SA and TNK Trading International SA supplied PDVSA petrol and petrol components in exchange for crude oil cargoes.
In January, according to the group’s most recent reports, the Organization of the Petroleum Exporting Countries pumped 220,000 barrels a day more than the markets demand this year. However, in the week ending Feb. 2—when U.S. restrictions were imposed — Venezuelan oil shipments to the U.S. fell by a total of 242,000 barrels a day, the U.S. reports. Energy Information Management. It’s uncertain if the Venezuelan supplies diverted to the U.S. are being transferred elsewhere. According to satellite images obtained via the FleetMon website, dozens of tankers which normally ship crude and oil products are sitting idle near Venezuelan ports. Meanwhile, supplies from Canada and the US face bottlenecks in the pipeline. According to a survey by Scandinavian consultancy company Rystad Energy, U.S. refiners would have to spend a premium to offset Caracas’ heavy oil with alternatives—a expense that would shift on customers.
Petro-Diplomacy: Venezuela, Iran, and the U.S.
20 JAN 2019 Carla V. Guillamon
https://intpolicydigest.org/2019/01/20/petro-diplomacy-venezuela-iran-and-the-u-s/
In welcoming Mahmoud Ahmadinejad, Iran’s former president, to Venezuela on November 25, 2009, Hugo Chávez described Ahmadinejad as “the gladiator of anti-imperialist struggles.” A clear indicator of the symbiotic relationship between the two petroleum-exporting states. Venezuela and Iran form an unconventional partnership made up of various bilateral agreements, joint operations, and mutual animosity towards the United States, intergovernmental organizations, and human rights. Given Venezuela’s geopolitical instability and the likelihood of increased sanctions on both Venezuela and Iran, Venezuela’s relationship with Iran will undoubtedly strengthen.
Venezuela is one of the world’s largest exporters of petroleum and one of the founding members of OPEC. By the time of the OPEC’s formation, Venezuela was fairly well off. The country produced more than 10% of the world’s crude oil and had a larger GDP than most Latin American countries. Venezuela was seeking to diversify its economy since it wanted to avoid becoming a rentier state like Iran. Although Venezuela had plans to diversify its economy, that all changed in the 1970s.
Fast forward to the 1990s, Venezuela got hit with a collapse of oil prices in 1998 and the presidency of Hugo Chávez. Chávez ran on the promise to restore Venezuela’s economy by attacking the meritocracy at PDVSA, in order to exert his control over the state-owned company and maximize its revenue for his socialist agenda. His ignorance about everything that had to do with oil led to him spending all the revenues on his social and international assistance programs. This resulted in a lack of investment in newer technology that could refine heavy Venezuelan oil, which the U.S. and other oil-producing countries had at the time. This led to a spike that increased the income of the Venezuelan economy but led to the undermining of the utility of oil revenues as an instrument for foreign policy in the 2000s.
When oil strategies fail
In Venezuela, the Chávez administration used high oil prices to gain revenue for his populist policies and gain support from his workers, leading to overspending in social programs, shortages in Venezuela, rising inflation, increase in poverty rates, and low healthcare. Since the death of Chávez in 2013 and current President Nicolás Maduro’s policies, oil production in Venezuela has suffered tremendously, reaching the lowest production of oil and the highest inflation rate in the world. As a result of the current humanitarian crisis and increase in shortages, Venezuelan workers have not been able to perform their work because of malnourishment, reflecting a need for both a change in regime and restructuring of the economy.
Similarly, Iran has produced less oil since the 1979 revolution, struggling to maintain production over 3.5 million barrels per day. Its fluctuations in revenues led to deficits and period of high inflation, and its misuse of oil revenues caused long-term economic problems. Under President Mahmoud Ahmadinejad’s rule, Iran also embarked on a populist spending program, which caused a fall in imports and foreign exchange shortfalls. Current President Hassan Rouhani took office in 2013 and prioritized reforming the oil and gas sector, but since the May 2018 sanctions by the United States and the U.S.’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA), Iran’s crude oil exports and production have declined.
Venezuela-Iran Relations
In order to explain Venezuela’s relations with Iran, one must consider both Venezuela’s soft balancing of the United States and the extra hemispheric policies with other authoritarian regimes, including Russia and China. The main four policy objectives under Chávez was finding allies that could help Venezuela soft balance the United States, acquiring a large supply of weapons, identify trading partners that do business through state-owned companies, and aligning with foreign governments not held accountable to any democratic mechanism. This led to the rapprochement between Venezuela and Iran in 2005 and becoming Iran’s closest ally in the region, which first started with the 2005 elections of Iran’s President Mahmoud Ahmadinejad.
Both Ahmadinejad and Chávez visited each other multiple times, signing more than 270 bilateral deals to support multiple Venezuelan campaigns for social and infrastructural national development. This tie also provided arms and ammunition, which further alarmed the United States with fears of developing nuclear capacities in Latin America.
The close connection that Venezuela and Iran have is through cooperation around petroleum. Iran’s state-owned company, Petropars, signed an agreement with PDVSA to explore and extract oil in Venezuela’s Orinoco Belt in 2006. The cooperation between Caracas and Tehran enraged the United States, specifically with the non-transparency of their relationship and the unsavory actions produced from it. The actions included allowing terrorists to go through Venezuela, supplying weapons and cash transfers to each other, and permitting Hezbollah to finance their operations through the drug trade. In 2007, Iran and Venezuela established a bank called the Banco Internacional de Desarrollo in Caracas, now owned by the Export Development Bank of Iran (EDBI), with the Bank Toseyeh Saderat as a major Iranian shareholder. This action could be considered one of the most important security concerns for the United States and thus led to an increase in U.S.-led efforts to prevent Iran’s nuclear program and sponsorship of international terrorism.
Nevertheless, these efforts are clearly failing, as the U.S. imposes more sanctions on its adversaries, while Iran gains traction by becoming their ally. With the most recent sanctions on Iran’s central bank in 2011, which handles Iran’s oil revenues, Venezuela criticized the United States during another visit by Ahmadinejad to Caracas by stating that “A spokesman or spokeswoman in Washington from the State Department or the White House said it was not convenient for any country to get close to Iran. Well, the truth is, it made you laugh…We are free. The people of Latin America will never again kneel, dominated by the imperial Yankee. Never again.” By presenting this anti-U.S. rhetoric during the period of high tensions, Chávez defiantly justified his relationship with Iran as a partnership against a common evil.
The future is murky
By imposing more sanctions on the two oil-producing giants, the United States is just pushing them to help each other and send oil prices soaring, which is a win for both Iran and Venezuela. Since China and India are the biggest buyers of Iranian crude and provide markets for over 40% of Venezuela’s exports, the two Asian countries would probably have to replace lost barrels with sales from other members of OPEC, including Saudi Arabia, or even Russia. Even though China and India are not directly involved with the sanctions imposed on Venezuela and Iran, they could turn to Russia as a major oil supplier, further upsettings the U.S. Any sanctions that the United States imposes on Iran would take more oil off international markets, further reducing Iranian exports of at least 200,000 barrels a day by next year. However, Chinese and Russian traders could buy Iranian crude through cryptocurrencies at discounts or trade the shipments on global markets. It was recently proposed that Iran might be investing in research transactions, according to Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, who recently spoke about international payment systems.
Venezuela has also reportedly received help from Moscow and also launched a new cryptocurrency called Petro, that President Maduro described as “kryptonite” against the U.S. government. Russia continues to pour money through the new cryptocurrency initiative into the unstable government as it picks up cheap oil fields. If Venezuela’s government collapses, it will jeopardize the payment of more than $50 billion in loans to China and the future of oilfield acquisitions by Rosneft. Russia may attempt to pick up additional land in Venezuela, by supporting the Venezuelan military, and destroy PDVSA, which may lead to President Maduro stepping down. Russia will benefit from any rise in oil that comes from the reduction of global supplies and catapults it to increase oil field acquisitions in Venezuela.
Given Venezuela’s unstable socioeconomic and political future and U.S. sanctions on both Iran and Venezuela’s exportation of crude oil, Venezuela and Iran’s export profitability in Asia will be much bigger than attempting to reestablish business ties with the U.S. The U.S. already has traction within the OPEC, given its alliance with Saudi Arabia. However, Russia was the third largest producers of oil in 2017 with only less than 1 million barrels per day than Saudi Arabia. This gives traction to Russia under OPEC and securing ties with Venezuela, and maybe even Iran, in an unconventional alliance. Iran has stressed the need to create new mobility and economic relations between the two countries, by statingthat Venezuela needs to reduce its dependence on oil and increase perseverance in resisting sanctions.
Therefore, the United States of America should consider that an intervention in the downfall of President Maduro, similar to the 1953 coup d’état in Iran, will increase anti-U.S. sentiments in the region and discredit the democratic transition of power in Latin America. Venezuela should use Iranian, Russian, and Chinese investments to develop renewable energy and ultimately diversify its economy. Finally, though limited with the current political situation, Iran should also diversify its economy and plan to shift to renewable energy and new technology for the sake of both climate change and its future relationship with Venezuela and the United States of America.
Venezuela ships fuel to Syria
18.02.2012 12:54
The government of Venezuela's Hugo Chavez is emerging as a rare supplier of diesel to Syria, potentially undermining Western sanctions and helping the Syrian government fuel its military in the middle of a bloody crackdown on civilian protests, Reuters re
A cargo of diesel, which can be used to fuel army tanks or as heating fuel, was expected to arrive at Syria's Mediterranean port of Banias this week, according to two traders and shipping data. The cargo could be worth up to $50 million.
Chavez is a vociferous advocate of Syrian President Bashar al-Assad and Iranian President Mahmoud Ahmadinejad, who face pressure from Western sanctions. Few leaders on the world stage have polarized opinion as sharply as the Venezuelan president.
Chavez, who still defends the late Libyan leader Muammar Gaddafi, has repeatedly backed Arab leaders who have faced a year-long wave of popular protests, which have already toppled four governments.
Asked on Thursday about the shipments to Syria and whether they could be used for military purposes, Chavez said Venezuela never asked the United States what it did with the fuel that Venezuela sold it, and that no one could dictate to Caracas.
"We are free. We are a free country," he said, standing with his friend Sean Penn, the U.S. actor, who is visiting Venezuela.
Venezuelan state oil firm PDVSA shipped the cargo aboard the Negra Hipolita vessel, according to AIS tracking data on the Reuters Freight Fundamentals Database and trade sources. The same tanker carried the first such shipment in November, the sources said.
PDVSA could not immediately be reached for comment.
"The aggressions against Syria are continuing," Chavez said in a speech last month. "It's the same formula they (the West) used against Libya: inject violence, inject terrorism from abroad and later invoke the United Nations to intervene."
The South American OPEC nation has also tried to aid Iran with fuel supplies amid sanctions over Tehran's nuclear program.
Rights groups say close to 6,000 people have been killed in attacks by Syrian security forces against civilian demonstrators and an increasingly powerful rebel insurgency.
The United States and Europe are pressuring Assad to leave power. Russia and China this month vetoed a United Nations resolution calling on Assad to step aside.
SATELLITE TRACKING
The Venezuelan tanker was last seen off the coast of Cyprus with a destination of Banias and the estimated arrival date of Wednesday, AIS ship tracking on Reuters showed. The satellite tracking has been switched off since Wednesday.
The shipment comes at a critical time for Syria, which has faced worsening energy shortages this winter after Western sanctions all but halted imports, which are needed to meet half the country's diesel demand.
Diplomats blame the power and fuel shortages on increased demand from the military, while the government says attacks on power stations and refinery pipelines are reducing supply.
The PDVSA shipments appeared to be carried out under a 2010 agreement between the governments of the two nations in which Venezuela provides diesel in exchange for food and commodities such as olive oil.
Syria's oil minister spoke about the possibility of Venezuelan imports in January, and traders said the Negra Hipolita diesel shipment to Syria was the second delivery in the past three months.
The vessel can carry 47,000 tones, which if fully loaded would be worth around $50 million. It was not clear how much diesel the ship was carrying.
While there is no blanket embargo on supplying fuel to Syria, its state-owned oil firm Sytrol, responsible for organizing fuel imports and exports, was placed on a U.S. blacklist last summer, and the European Union followed suit in December.
It was not clear whether the recent reported fuel transactions were done via Sytrol.
The EU has stopped short of banning product deliveries for humanitarian reasons, but oil traders said most deliveries have stopped anyway as traditional suppliers are increasingly reluctant to do business with Syria.
Normally an exporter of crude oil even in peacetime, Syria has relied on imports for more than half of its annual consumption of 5 million tones of diesel because of a shortage of domestic refining capacity. International sanctions have stopped Syrian oil exports since September last year, drastically stretching government budget revenues.
A growing number of military attacks involving armored vehicles and tanks may be spurring diesel consumption, while a severe winter is driving up heating demand.
"Given the risk that (refining) capacity could be cut due to sabotage, fuel shortages are likely to force the government to rely on costly imports supplied by a shrinking pool of political allies," risk group Business Monitor International wrote in a recent report.
Due to the sanctions, the Negra Hipolita will not be able to dock at ports in the United States nor in Europe, one of the sources said. In the past the vessel has been primarily used to transport crude between production facilities and refineries within Venezuela.
The United States previously imposed sanctions on PDVSA over sales of gasoline-blending components to Iran in violation of a U.S. ban.
Understanding the Iran-Venezuela Relationship
June 4, 2020
https://www.csis.org/analysis/understanding-iran-venezuela-relationship
Iran has made headlines over the past week after successfully shipping multiple fuel tankers to Venezuela, where fuel shortages have spread throughout the country. The move has raised concerns in the United States and throughout the Western Hemisphere regarding a strengthening alliance between two nations that have consistently harbored anti-U.S. sentiment.
In sending these tankers, Iran defied the U.S. maximum pressure campaign to oust the Maduro regime and restore democracy in Venezuela. While worrisome, this act of defiance has perhaps received an outsized response for what amounts to a relatively unexceptional gesture in the grand scheme of Iran-Venezuela relations.
As policymakers consider responses to Iran’s actions, they would be best served to recall that Iran and Venezuela have had a diplomatic and commercial relationship for decades—one that was much stronger and more alarming during the Chávez presidency than it is today. This relationship has often generated provocative headlines while failing to deliver on tangible achievements.
The Fortune, the first of a five-tanker Iranian flotilla, arrived at a port serving El Palito refinery on May 25.
A Longstanding Relationship
The two countries, both founding members of the Organization of the Petroleum Exporting Countries (OPEC), have had a bilateral relationship since before Iran’s 1979 revolution. When the shah was overthrown in 1979, Venezuela was one of the first countries to recognize the new Iranian government. For the next two decades, the countries’ collaboration was limited to the oil industry.
This relationship intensified, however, when Chávez became president. Between 2001 and 2013, there were dozens of diplomatic visits between the Chávez and the Khatami and Ahmadinejad administrations. The two countries signed an estimated 300 agreements of varying importance and value, ranging from working on low-income housing developments to cement plants and car factories. They even established a joint development fund and opened a development bank under the structure of Iran’s Export Development Bank (EDBI). By 2012, Iran’s investments and loans in Venezuela were valued at $15 billion.
In true Bolivarian fashion, most of these initiatives petered out before they were completed. A car factory, which Chávez claimed would manufacture 25,000 units per year, produced fewer than 2,000 units in 2014. A cement factory, which was announced in 2005, did not start production until 2012. Some of the initiatives reportedly were also used to facilitate illicit activities. In 2008, for example, Turkish officials seized 22 Iranian containers bound for Venezuela which were labeled as “tractor parts” but reportedlycontained materials for an explosives lab. The EDBI was sanctioned by the United States and the European Union for alleged linkages to Iran’s nuclear weapons program.
Chavez’s Vision for Iran in Latin America
The relationship was symbiotic. With little actual investment, Iran’s development efforts inside Venezuela boosted Chavez’s image and advanced his anti-imperialist agenda throughout the region. For Iran, Venezuela became a beachhead for diplomatic and commercial expansion into Latin America. Chávez ushered the Iranians to his regional allies, opening up channels of communication that led to agreements between Ahmadinejad and the governments of Ecuador, Bolivia, and Nicaragua. As Iran faced increasing financial isolation due to U.S. sanctions, Venezuela, through its Bolivarian Alliance for the Americas (ALBA), helped open up vital trade links.
The Significance of Iran’s Gasoline Tankers
The relationship between Iran and Venezuela began to dwindle after Chávez died in 2013. After all, the two countries share few areas of natural commonality. Amid plummeting oil prices, Ahmadinejad’s successor, President Rouhani, stopped prioritizing Venezuela. Aside from a few bilateral agreements of questionable heft, Maduro had generally been unable to maintain the sort of relationship with Iran that Chávez envisioned. To the extent there is a relationship, that relationship is driven primarily by links between the office of the Iranian supreme leader and a handful of very senior Venezuelan military leaders.
Iran is providing Venezuela with 1.53 million barrels of gasoline and refining components.
Last week’s gasoline shipments represent a renewed commitment between the two countries, both of which are increasingly financially and diplomatically isolated. But this relationship is not new, and it has become more tactical than strategic. It should therefore not be perceived as a paradigm-shifting threat to the United States’ anti-Maduro campaign. Iran and Venezuela are still cooperating much less than they did during Chávez years. Furthermore, the gasoline shipments are too limited to satiate Venezuela’s demand, and Iran is institutionally and commercially incapable of replacing Russia’s Rosneft as Maduro’s lifeline. The countries’ efforts to revive Venezuela’s refineries, moreover, will hinge primarily on their ability to carry out technical upgrades without delays, corruption, and mismanagement. As the countries’ long list of failed partnerships indicates, that is unlikely.
Moises Rendon is director of the Future of Venezuela Initiative and a fellow with the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Antonio de la Cruz is a senior associate with the CSIS Americas Program. Claudia Fernandez is a research associate with the CSIS Future of Venezuela Initiative.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2020 by the Center for Strategic and International Studies. All rights reserved.
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https://intpolicydigest.org/2019/01/20/petro-diplomacy-venezuela-iran-and-the-u-s/
In welcoming Mahmoud Ahmadinejad, Iran’s former president, to Venezuela on November 25, 2009, Hugo Chávez described Ahmadinejad as “the gladiator of anti-imperialist struggles.” A clear indicator of the symbiotic relationship between the two petroleum-exporting states. Venezuela and Iran form an unconventional partnership made up of various bilateral agreements, joint operations, and mutual animosity towards the United States, intergovernmental organizations, and human rights. Given Venezuela’s geopolitical instability and the likelihood of increased sanctions on both Venezuela and Iran, Venezuela’s relationship with Iran will undoubtedly strengthen.
Venezuela is one of the world’s largest exporters of petroleum and one of the founding members of OPEC. By the time of the OPEC’s formation, Venezuela was fairly well off. The country produced more than 10% of the world’s crude oil and had a larger GDP than most Latin American countries. Venezuela was seeking to diversify its economy since it wanted to avoid becoming a rentier state like Iran. Although Venezuela had plans to diversify its economy, that all changed in the 1970s.
Fast forward to the 1990s, Venezuela got hit with a collapse of oil prices in 1998 and the presidency of Hugo Chávez. Chávez ran on the promise to restore Venezuela’s economy by attacking the meritocracy at PDVSA, in order to exert his control over the state-owned company and maximize its revenue for his socialist agenda. His ignorance about everything that had to do with oil led to him spending all the revenues on his social and international assistance programs. This resulted in a lack of investment in newer technology that could refine heavy Venezuelan oil, which the U.S. and other oil-producing countries had at the time. This led to a spike that increased the income of the Venezuelan economy but led to the undermining of the utility of oil revenues as an instrument for foreign policy in the 2000s.
When oil strategies fail
In Venezuela, the Chávez administration used high oil prices to gain revenue for his populist policies and gain support from his workers, leading to overspending in social programs, shortages in Venezuela, rising inflation, increase in poverty rates, and low healthcare. Since the death of Chávez in 2013 and current President Nicolás Maduro’s policies, oil production in Venezuela has suffered tremendously, reaching the lowest production of oil and the highest inflation rate in the world. As a result of the current humanitarian crisis and increase in shortages, Venezuelan workers have not been able to perform their work because of malnourishment, reflecting a need for both a change in regime and restructuring of the economy.
Similarly, Iran has produced less oil since the 1979 revolution, struggling to maintain production over 3.5 million barrels per day. Its fluctuations in revenues led to deficits and period of high inflation, and its misuse of oil revenues caused long-term economic problems. Under President Mahmoud Ahmadinejad’s rule, Iran also embarked on a populist spending program, which caused a fall in imports and foreign exchange shortfalls. Current President Hassan Rouhani took office in 2013 and prioritized reforming the oil and gas sector, but since the May 2018 sanctions by the United States and the U.S.’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA), Iran’s crude oil exports and production have declined.
Venezuela-Iran Relations
In order to explain Venezuela’s relations with Iran, one must consider both Venezuela’s soft balancing of the United States and the extra hemispheric policies with other authoritarian regimes, including Russia and China. The main four policy objectives under Chávez was finding allies that could help Venezuela soft balance the United States, acquiring a large supply of weapons, identify trading partners that do business through state-owned companies, and aligning with foreign governments not held accountable to any democratic mechanism. This led to the rapprochement between Venezuela and Iran in 2005 and becoming Iran’s closest ally in the region, which first started with the 2005 elections of Iran’s President Mahmoud Ahmadinejad.
Both Ahmadinejad and Chávez visited each other multiple times, signing more than 270 bilateral deals to support multiple Venezuelan campaigns for social and infrastructural national development. This tie also provided arms and ammunition, which further alarmed the United States with fears of developing nuclear capacities in Latin America.
The close connection that Venezuela and Iran have is through cooperation around petroleum. Iran’s state-owned company, Petropars, signed an agreement with PDVSA to explore and extract oil in Venezuela’s Orinoco Belt in 2006. The cooperation between Caracas and Tehran enraged the United States, specifically with the non-transparency of their relationship and the unsavory actions produced from it. The actions included allowing terrorists to go through Venezuela, supplying weapons and cash transfers to each other, and permitting Hezbollah to finance their operations through the drug trade. In 2007, Iran and Venezuela established a bank called the Banco Internacional de Desarrollo in Caracas, now owned by the Export Development Bank of Iran (EDBI), with the Bank Toseyeh Saderat as a major Iranian shareholder. This action could be considered one of the most important security concerns for the United States and thus led to an increase in U.S.-led efforts to prevent Iran’s nuclear program and sponsorship of international terrorism.
Nevertheless, these efforts are clearly failing, as the U.S. imposes more sanctions on its adversaries, while Iran gains traction by becoming their ally. With the most recent sanctions on Iran’s central bank in 2011, which handles Iran’s oil revenues, Venezuela criticized the United States during another visit by Ahmadinejad to Caracas by stating that “A spokesman or spokeswoman in Washington from the State Department or the White House said it was not convenient for any country to get close to Iran. Well, the truth is, it made you laugh…We are free. The people of Latin America will never again kneel, dominated by the imperial Yankee. Never again.” By presenting this anti-U.S. rhetoric during the period of high tensions, Chávez defiantly justified his relationship with Iran as a partnership against a common evil.
The future is murky
By imposing more sanctions on the two oil-producing giants, the United States is just pushing them to help each other and send oil prices soaring, which is a win for both Iran and Venezuela. Since China and India are the biggest buyers of Iranian crude and provide markets for over 40% of Venezuela’s exports, the two Asian countries would probably have to replace lost barrels with sales from other members of OPEC, including Saudi Arabia, or even Russia. Even though China and India are not directly involved with the sanctions imposed on Venezuela and Iran, they could turn to Russia as a major oil supplier, further upsettings the U.S. Any sanctions that the United States imposes on Iran would take more oil off international markets, further reducing Iranian exports of at least 200,000 barrels a day by next year. However, Chinese and Russian traders could buy Iranian crude through cryptocurrencies at discounts or trade the shipments on global markets. It was recently proposed that Iran might be investing in research transactions, according to Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, who recently spoke about international payment systems.
Venezuela has also reportedly received help from Moscow and also launched a new cryptocurrency called Petro, that President Maduro described as “kryptonite” against the U.S. government. Russia continues to pour money through the new cryptocurrency initiative into the unstable government as it picks up cheap oil fields. If Venezuela’s government collapses, it will jeopardize the payment of more than $50 billion in loans to China and the future of oilfield acquisitions by Rosneft. Russia may attempt to pick up additional land in Venezuela, by supporting the Venezuelan military, and destroy PDVSA, which may lead to President Maduro stepping down. Russia will benefit from any rise in oil that comes from the reduction of global supplies and catapults it to increase oil field acquisitions in Venezuela.
Given Venezuela’s unstable socioeconomic and political future and U.S. sanctions on both Iran and Venezuela’s exportation of crude oil, Venezuela and Iran’s export profitability in Asia will be much bigger than attempting to reestablish business ties with the U.S. The U.S. already has traction within the OPEC, given its alliance with Saudi Arabia. However, Russia was the third largest producers of oil in 2017 with only less than 1 million barrels per day than Saudi Arabia. This gives traction to Russia under OPEC and securing ties with Venezuela, and maybe even Iran, in an unconventional alliance. Iran has stressed the need to create new mobility and economic relations between the two countries, by statingthat Venezuela needs to reduce its dependence on oil and increase perseverance in resisting sanctions.
Therefore, the United States of America should consider that an intervention in the downfall of President Maduro, similar to the 1953 coup d’état in Iran, will increase anti-U.S. sentiments in the region and discredit the democratic transition of power in Latin America. Venezuela should use Iranian, Russian, and Chinese investments to develop renewable energy and ultimately diversify its economy. Finally, though limited with the current political situation, Iran should also diversify its economy and plan to shift to renewable energy and new technology for the sake of both climate change and its future relationship with Venezuela and the United States of America.
Venezuela ships fuel to Syria
18.02.2012 12:54
The government of Venezuela's Hugo Chavez is emerging as a rare supplier of diesel to Syria, potentially undermining Western sanctions and helping the Syrian government fuel its military in the middle of a bloody crackdown on civilian protests, Reuters re
A cargo of diesel, which can be used to fuel army tanks or as heating fuel, was expected to arrive at Syria's Mediterranean port of Banias this week, according to two traders and shipping data. The cargo could be worth up to $50 million.
Chavez is a vociferous advocate of Syrian President Bashar al-Assad and Iranian President Mahmoud Ahmadinejad, who face pressure from Western sanctions. Few leaders on the world stage have polarized opinion as sharply as the Venezuelan president.
Chavez, who still defends the late Libyan leader Muammar Gaddafi, has repeatedly backed Arab leaders who have faced a year-long wave of popular protests, which have already toppled four governments.
Asked on Thursday about the shipments to Syria and whether they could be used for military purposes, Chavez said Venezuela never asked the United States what it did with the fuel that Venezuela sold it, and that no one could dictate to Caracas.
"We are free. We are a free country," he said, standing with his friend Sean Penn, the U.S. actor, who is visiting Venezuela.
Venezuelan state oil firm PDVSA shipped the cargo aboard the Negra Hipolita vessel, according to AIS tracking data on the Reuters Freight Fundamentals Database and trade sources. The same tanker carried the first such shipment in November, the sources said.
PDVSA could not immediately be reached for comment.
"The aggressions against Syria are continuing," Chavez said in a speech last month. "It's the same formula they (the West) used against Libya: inject violence, inject terrorism from abroad and later invoke the United Nations to intervene."
The South American OPEC nation has also tried to aid Iran with fuel supplies amid sanctions over Tehran's nuclear program.
Rights groups say close to 6,000 people have been killed in attacks by Syrian security forces against civilian demonstrators and an increasingly powerful rebel insurgency.
The United States and Europe are pressuring Assad to leave power. Russia and China this month vetoed a United Nations resolution calling on Assad to step aside.
SATELLITE TRACKING
The Venezuelan tanker was last seen off the coast of Cyprus with a destination of Banias and the estimated arrival date of Wednesday, AIS ship tracking on Reuters showed. The satellite tracking has been switched off since Wednesday.
The shipment comes at a critical time for Syria, which has faced worsening energy shortages this winter after Western sanctions all but halted imports, which are needed to meet half the country's diesel demand.
Diplomats blame the power and fuel shortages on increased demand from the military, while the government says attacks on power stations and refinery pipelines are reducing supply.
The PDVSA shipments appeared to be carried out under a 2010 agreement between the governments of the two nations in which Venezuela provides diesel in exchange for food and commodities such as olive oil.
Syria's oil minister spoke about the possibility of Venezuelan imports in January, and traders said the Negra Hipolita diesel shipment to Syria was the second delivery in the past three months.
The vessel can carry 47,000 tones, which if fully loaded would be worth around $50 million. It was not clear how much diesel the ship was carrying.
While there is no blanket embargo on supplying fuel to Syria, its state-owned oil firm Sytrol, responsible for organizing fuel imports and exports, was placed on a U.S. blacklist last summer, and the European Union followed suit in December.
It was not clear whether the recent reported fuel transactions were done via Sytrol.
The EU has stopped short of banning product deliveries for humanitarian reasons, but oil traders said most deliveries have stopped anyway as traditional suppliers are increasingly reluctant to do business with Syria.
Normally an exporter of crude oil even in peacetime, Syria has relied on imports for more than half of its annual consumption of 5 million tones of diesel because of a shortage of domestic refining capacity. International sanctions have stopped Syrian oil exports since September last year, drastically stretching government budget revenues.
A growing number of military attacks involving armored vehicles and tanks may be spurring diesel consumption, while a severe winter is driving up heating demand.
"Given the risk that (refining) capacity could be cut due to sabotage, fuel shortages are likely to force the government to rely on costly imports supplied by a shrinking pool of political allies," risk group Business Monitor International wrote in a recent report.
Due to the sanctions, the Negra Hipolita will not be able to dock at ports in the United States nor in Europe, one of the sources said. In the past the vessel has been primarily used to transport crude between production facilities and refineries within Venezuela.
The United States previously imposed sanctions on PDVSA over sales of gasoline-blending components to Iran in violation of a U.S. ban.
Understanding the Iran-Venezuela Relationship
June 4, 2020
https://www.csis.org/analysis/understanding-iran-venezuela-relationship
Iran has made headlines over the past week after successfully shipping multiple fuel tankers to Venezuela, where fuel shortages have spread throughout the country. The move has raised concerns in the United States and throughout the Western Hemisphere regarding a strengthening alliance between two nations that have consistently harbored anti-U.S. sentiment.
In sending these tankers, Iran defied the U.S. maximum pressure campaign to oust the Maduro regime and restore democracy in Venezuela. While worrisome, this act of defiance has perhaps received an outsized response for what amounts to a relatively unexceptional gesture in the grand scheme of Iran-Venezuela relations.
As policymakers consider responses to Iran’s actions, they would be best served to recall that Iran and Venezuela have had a diplomatic and commercial relationship for decades—one that was much stronger and more alarming during the Chávez presidency than it is today. This relationship has often generated provocative headlines while failing to deliver on tangible achievements.
The Fortune, the first of a five-tanker Iranian flotilla, arrived at a port serving El Palito refinery on May 25.
A Longstanding Relationship
The two countries, both founding members of the Organization of the Petroleum Exporting Countries (OPEC), have had a bilateral relationship since before Iran’s 1979 revolution. When the shah was overthrown in 1979, Venezuela was one of the first countries to recognize the new Iranian government. For the next two decades, the countries’ collaboration was limited to the oil industry.
This relationship intensified, however, when Chávez became president. Between 2001 and 2013, there were dozens of diplomatic visits between the Chávez and the Khatami and Ahmadinejad administrations. The two countries signed an estimated 300 agreements of varying importance and value, ranging from working on low-income housing developments to cement plants and car factories. They even established a joint development fund and opened a development bank under the structure of Iran’s Export Development Bank (EDBI). By 2012, Iran’s investments and loans in Venezuela were valued at $15 billion.
In true Bolivarian fashion, most of these initiatives petered out before they were completed. A car factory, which Chávez claimed would manufacture 25,000 units per year, produced fewer than 2,000 units in 2014. A cement factory, which was announced in 2005, did not start production until 2012. Some of the initiatives reportedly were also used to facilitate illicit activities. In 2008, for example, Turkish officials seized 22 Iranian containers bound for Venezuela which were labeled as “tractor parts” but reportedlycontained materials for an explosives lab. The EDBI was sanctioned by the United States and the European Union for alleged linkages to Iran’s nuclear weapons program.
Chavez’s Vision for Iran in Latin America
The relationship was symbiotic. With little actual investment, Iran’s development efforts inside Venezuela boosted Chavez’s image and advanced his anti-imperialist agenda throughout the region. For Iran, Venezuela became a beachhead for diplomatic and commercial expansion into Latin America. Chávez ushered the Iranians to his regional allies, opening up channels of communication that led to agreements between Ahmadinejad and the governments of Ecuador, Bolivia, and Nicaragua. As Iran faced increasing financial isolation due to U.S. sanctions, Venezuela, through its Bolivarian Alliance for the Americas (ALBA), helped open up vital trade links.
The Significance of Iran’s Gasoline Tankers
The relationship between Iran and Venezuela began to dwindle after Chávez died in 2013. After all, the two countries share few areas of natural commonality. Amid plummeting oil prices, Ahmadinejad’s successor, President Rouhani, stopped prioritizing Venezuela. Aside from a few bilateral agreements of questionable heft, Maduro had generally been unable to maintain the sort of relationship with Iran that Chávez envisioned. To the extent there is a relationship, that relationship is driven primarily by links between the office of the Iranian supreme leader and a handful of very senior Venezuelan military leaders.
Iran is providing Venezuela with 1.53 million barrels of gasoline and refining components.Last week’s gasoline shipments represent a renewed commitment between the two countries, both of which are increasingly financially and diplomatically isolated. But this relationship is not new, and it has become more tactical than strategic. It should therefore not be perceived as a paradigm-shifting threat to the United States’ anti-Maduro campaign. Iran and Venezuela are still cooperating much less than they did during Chávez years. Furthermore, the gasoline shipments are too limited to satiate Venezuela’s demand, and Iran is institutionally and commercially incapable of replacing Russia’s Rosneft as Maduro’s lifeline. The countries’ efforts to revive Venezuela’s refineries, moreover, will hinge primarily on their ability to carry out technical upgrades without delays, corruption, and mismanagement. As the countries’ long list of failed partnerships indicates, that is unlikely.
Moises Rendon is director of the Future of Venezuela Initiative and a fellow with the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Antonio de la Cruz is a senior associate with the CSIS Americas Program. Claudia Fernandez is a research associate with the CSIS Future of Venezuela Initiative.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2020 by the Center for Strategic and International Studies. All rights reserved.
WRITTEN BY
Moises Rendon
Director, The Future of Venezuela Initiative and Fellow, Americas Program
Antonio De La Cruz
Senior Associate (Non-resident), Americas Program
Claudia Fernandez
Research Associate, The Future of Venezuela Initiative
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Venezuela resumes direct China oil deliveries despite US sanctions
Friday, 27 November 2020 10:56 AM [ Last Update: Friday, 27 November 2020 12:48 PM ]
https://www.presstv.com/Detail/2020/11/27/639469/Venezuela-US-sanctions-oil-shipments-to-China
An oil tanker is seen at Jose refinery cargo terminal in Venezuela. (File photo)Venezuela has reportedly resumed direct oil shipments to China after brutal US sanctions against the Central American nation forced the trade to go underground for more than a year.
Two China-flagged very large crude carriers (VLCC) with the capacity to transport some nearly 2 million barrels of crude each loaded Venezuelan heavy crude at the Jose terminal in recent days, Reuters reported Friday citing internal documents from Venezuela’s state oil company, Petroleos de Venezuela (PDVSA) and Refinitiv Eikon vessel-tracking data.
One of the vessels, the Xingye, departed from Venezuela on Thursday signaling Singapore as its destination, Eikon data showed. The other carrier -- the Thousand Sunny -- has not yet set sail, according to the report, which noted that both tankers were owned by a PDVSA-PetroChina joint venture until earlier this year when PetroChina assumed full ownership.
China has joined Venezuela’s two other close allies - Russia and Cuba - in publicly censuring US sanctions on OPEC-member Venezuela.
The imposition of the American sanctions against oil-rich Venezuela was part of a persisting plot by the hawkish Trump administration to oust President Nicolas Maduro, though they failed to completely halt Caracas’s oil exports or to overthrow the president.
According to the report, Maduro’s administration held a meeting with a delegation of Chinese officials and businessmen this month to tout a new law to promote investment in the face of what Caracas refers to as Washington’s “blockade” of the country. The law allows Venezuela to sign new oil deals confidentially.
Defying US sanctions, Iran completes 2nd fuel delivery mission to VenezuelaThe third and final vessel from a fuel-laden Iranian flotilla enters Venezuela’s waters, completing a second such mission in less than a year.
Maduro stated during the meeting that he would send a letter to China’s President Xi Jinping encouraging more robust commercial relations between the two countries.
“We have to move forward with investments, with wealth creation, with new partnerships. The anti-blockade law allows all that. Let’s do it in this new phase,” he added.
The resumption of direct imports by China comes after Washington earlier this year took action against units of Russia’s Rosneft and later threatened to act against shipping firms that continued to do business with PDVSA following trade sanctions first imposed in early 2019.
Since its units were struck by US sanctions, Rosneft has halted business with PDVSA, the company has declared. However, the sanctions on its subsidiaries have not been lifted.
The US State Department, the report noted, offered no comment about the resumption of direct oil trade between Venezuela and China.
According to the report, Chinese state companies China National Petroleum Corp (CNPC) and PetroChina - long among PDVSA's top customers - stopped loading crude and fuel at Venezuelan ports in August 2019 after the Trump administration extended its sanctions on PDVSA to include any companies trading with the Venezuelan state firm.
PDVSA’s customers instead increased their shipments to Malaysia, where transfer of cargo between vessels at sea have allowed most of Venezuela’s crude oil to continue flowing to China after changing hands and using trade intermediaries.
A US Treasury Department spokesperson was quoted in the report as saying on Wednesday that “those engaged in activity in the Venezuelan oil sector risk exposure to sanctions.”
It said the first tanker to resume transport of Venezuelan crude directly to China was the Kyoto, which had loaded 1.8 million barrels of heavy crude at Venezuela’s Jose port in late August, according to shipping monitoring service TankerTrackers.com.
At least one other tanker, the Warrior King, is discharging Venezuelan crude at China’s Bayuquan port, while two PetroChina-owned vessels loaded oil in Venezuela this month.
The Kyoto -- chartered by a company called Wanneng Munay according to an internal PDVSA document -- discharged its load at China’s Dalian oil terminal in early November, according to Refinitiv Eikon’s data.
Wanneng Munay is among a group of more than a dozen Russian-registered companies that have emerged as PDVSA customers in recent months.
The emergence of such firms has allowed PDVSA to continue shipping crude oil to Asian destinations in recent months despite withdrawals by India’s Reliance Industries and Thailand’s Tipco after the US Treasury terminated their exemptions to sanctions.
The direct oil shipments come ahead of January’s transfer of power in Washington from Trump to Democratic President-elect Joe Biden, whose advisers have stated that he would retain sanctions against Venezuela but shift the focus of the American strategy.
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