Venezuela’s former Foreign Minister, Jorge Arreaza, visits Iran.
“Venezuela is rushing to meet the terms of a three-year alliance that has involved hundreds of millions of dollars in oil trades and contracts.”
Once considered to be one of the Maduro regime’s staunchest allies, the Venezuela-Iran relationship has entered a rocky period.[i] Beyond military cooperation, Iran has long provided critical support to the Maduro regime in the areas of sanctions evasion and diluents for crude oil refining. According to the first excerpted article from the Venezuelan daily El Nacional, the bilateral relationship began to deteriorate when the West partially lifted oil sanctions on Venezuela following pledges for freer and fairer presidential elections this year. The article reports that the Maduro regime shifted production and export to Western markets, falling woefully behind in its scheduled oil deliveries to Iran. The article also details that part of an earlier three-year agreement aimed at sanctions evasion saw Iran offload much of Venezuela’s sanctioned crude.[ii] The second excerpted article, from the business-focused Venezuelan news outlet Banca y Negocios, cites people familiar with the deal that helped boost Venezuela’s crude exports and mitigate fuel shortages while under previous sanctions. Under the deal, Iran also committed to renovating several of Venezuela’s large oil refineries. The Maduro regime’s decision to abandon the terms of its agreement with Iran has irked Iranian officials, according to the reporting by Banca y Negocios. At the same time, it speculates that the Maduro regime is motivated to return to the Iran deal as it anticipates the return of Western sanctions, having failed to comply with its prior commitments toward freer and fairer presidential elections. Returning to this agreement with Iran will be critical for the Maduro regime to survive the possible reimposition of Western sanctions on its oil sector.
Sources:
“Venezuela se apresura a mejorar su relación con Irán mientras se avecinan sanciones de EEUU (Venezuela rushes to improve its relationship with Iran as US sanctions loom),” El Nacional (Venezuelan daily focused on the politics of the Maduro regime), 13 March 2024. https://www.elnacional.com/economia/venezuela-se-apresura-a-mejorar-su-relacion-con-iran-mientras-se-avecinan-sanciones-de-ee-uu/
Iran and Venezuela are trying to rebuild an oil alliance that began to crumble last year after Venezuela fell behind in oil trades…A review of PDVSA data and shipping documents shows that Venezuela fell behind on payments to Iran, a shortfall that worsened when the United States began issuing licenses in late 2022. Those authorizations led the state firm to reallocate shipments…to save the partnership, Venezuela is rushing to meet the terms of a three-year alliance that has involved hundreds of millions of dollars in oil trades and contracts. Nicolás Maduro’s government is trying to settle outstanding debt by accelerating deliveries of heavy crude oil and fuel shipments to Iran.
“Venezuela busca mejorar su relación con Irán tras presentar retrasos en el intercambio petrolero (Venezuela seeks to improve its relationship with Iran after presenting delays in the oil exchange),” Banca y Negocios (a Venezuelan digital portal focused on financial and economic reporting), 12 March 2024. https://www.bancaynegocios.com/venezuela-busca-mejorar-su-relacion-con-iran-tras-presentar-retrasos-en-el-intercambio-petrolero/ Six people familiar with the matter stated that the agreement between both nations helped boost crude oil exports and alleviate the fuel problem that Venezuela suffered…the possible reimposition of sanctions by the United States would make the alliance between Venezuela and Iran essential to keeping the Venezuelan oil sector afloat…Venezuela is rushing to comply with the agreement and pay off the debt, amounting to hundreds of millions of dollars in oil exchanges and contracts, by accelerating the delivery of heavy hydrocarbons and fuel to the nation located in the Middle East.
Notes:
[i] For more historical background on the importance of the bilateral relationship, see: Moises Rendón and Claudia Fernandez, “The Fabulous Five: How Foreign Actors Prop Up the Maduro Regime in Venezuela,” CSIS Policy Brief, 19 October 2020, https://www.csis.org/analysis/fabulous-five-how-foreign-actors-prop-maduro-regime-venezuela
[ii] For more information on the deal signed between Iran and Venezuela, see: Deisy Buitrago and Vivian Sequera, “Iran, Venezuela Eye Trade Increase, Sign Petrochemical Deal,” Reuters, 12 June 2023, https://www.reuters.com/world/iranian-president-caracas-kicking-off-regional-tour-2023-06-12/
Image Information:
Image: Venezuela’s former Foreign Minister, Jorge Arreaza, visits Iran.
Source: https://commons.wikimedia.org/wiki/File:Venezuela%E2%80%99s_Top_Diplomat_Visits_Iran-9.jpg
Attribution: CC-BY-4.0.