US continued oil sanctions helping forge stronger Venezuela, Iran oil ties
What to make of President Nicolas Maduro’s incremental moves to extract his country’s oil & gas industry from the conundrum in which it finds itself is not an easy matter on which to make a definitive determination. On the one hand there have been reports that Caracas may have been displaying signs of urgency in untangling his country’s critical oil industry from the conundrum of a protracted effort, initiated by the Donald Trump administration in the US and extended by Trump’s successor, Joe Biden, to ensure that as long as President Maduro – who the US has accused of fraudulent elections and political repression – remains in office, the embargo, buttressed by sanctions against companies the cooperate with Venezuela to break it, remains in place.
Enter Iran, one of only a handful of countries prepared to ignore Washington’s effort to present Venezuela as a pariah state and to be part of the US embargo on Venezuela oil exports. More recently, Iran has deepened its ‘oil relations’ with Venezuela by facilitating oil imports from that country for refining in the west of the country.
Evidence of the new forward movement in relations between Teheran and Caracas was manifested in the visit to Venezuela by Iranian oil Minister Javad Owyl and his visit to the country’s Paraguana refining complex in the west of the country, according to a report emanating from Bloomberg.
Bloomberg says that the visit to Caracas by the Iranian Oil Minister will be seen (presumably in the west) as a reinforcement of a crucial relationship between Caracas and Iran with Maduro now committing himself to deepening cooperation with one of only a handful of countries that was prepared to come to his aid when the US sanctions began to bite.
The difficulty here reposes in the fact that the Iranians have come a-calling just two months after Washington has sought to engage Maduro, seeking it seems, to hedge its bets in relation to oil supplies from Venezuela in the light of the threatened global oil supply challenges arising out of Russia’s invasion of the Ukraine.
For the time being at least, none of this appears to have affected Venezuela’s relations with Iran, the concern here being that the recent talks in Caracas between President Biden’s emissaries and the Maduro administration may have gone sufficiently badly to ‘park’ the idea of an oil agreement between Washington and Caracas for the moment.
But the oil supply conundrum between Washington and Caracas is not as ‘cut and dried’ as it might appear. Reports are that away from the limelight some western countries, seized of a seeming global oil & gas emergency, have decided to move to build bridges with Venezuela, the country that boasts the largest volumes of oil reserves in the world as an option should the worst come to the worst insofar as Russian oil supplies are concerned.
The recent meeting between Maduro and the Iranian oil minister appeared to provide a greater measure of clarity insofar as relations between Venezuela and Iran are concerned. Quoting from a statement issued by the Venezuelan Oil Ministry, Bloomberg said that the two sides had agreed that “the purpose of continuing to deepen bilateral cooperation mechanisms” was to facilitate “the construction of routes and mechanisms to overcome the unilateral coercive measures imposed by the United States Government. United States and allied countries.”
A few years ago, at the height of the sanctions that had strangled Venezuelan oil exports, Iran became a major supplier of inputs to produce gasoline, condensates to dilute Venezuelan extra-heavy crude, spare parts for refineries, and technical personnel, this, to help to rebuild which had allegedly fallen into considerable decline on account of several years of corruption and mismanagement.