Reuters: Venezuela Owes Iran; Tehran and Caracas Seek 'Oil Alliance'

As U.S. sanctions against Venezuela's oil industry are set to be re-implemented in April 2024, the alliance between that country and the Iranian government will be vital for sustaining its energy sector. According to Reuters, the Islamic Republic of Iran and Venezuela are working to revive an oil alliance that was on the verge of collapse last year due to Venezuela's delays in oil shipments. The alliance had bolstered Venezuela's crude oil exports and significantly mitigated domestic fuel shortages. This week it was announced that elections are scheduled for July 29, 2024. The government of Nicolás Maduro, the current president of Venezuela, and the opposition signed an agreement in Barbados last November to hold the next elections freely, fairly, and with the presence of international observers. According to Reuters, Washington had previously announced its intention to temporarily ease sanctions during the Venezuelan presidential elections, but this promise will not materialize. An examination of data and transport documents from Venezuela's state oil company indicates that the country is behind in payments to Iran. This shortfall worsened when the U.S. began issuing licenses in the fall of 2022 that forced the state company to redirect shipments initially planned for Iran to 'delivery to cash-paying customers.' Venezuela is rushing to meet the conditions of a three-year alliance that includes hundreds of millions of dollars in oil exchanges and contracts to save its partnership with the Islamic Republic. Caracas is trying to settle outstanding debts by accelerating the delivery of crude oil and heavy fuel shipments to Iran. Pedro Tellechia, Venezuela's oil minister, stated in February, 'Despite facing challenges, especially regarding Venezuela's payments, both countries are determined to strengthen relations and enhance energy cooperation against U.S. pressure.' He mentioned that Venezuela's state oil company would carry out repairs on its refineries and petrochemical plants, which are a significant part of the 20-year contract with Iran, throughout this year. In a briefing at a fuel distribution plant in Carabobo state, he said, 'We are completing maintenance programs with the help of workers.' This follows the completion of a €110 million overhaul by Iranian technicians at Venezuela's smallest refinery, which was also supposed to be done last year at Paraguana – the country's largest refinery complex. Thus, Venezuela could import much-needed new processing equipment to replace aging U.S.-made equipment from Iran and China. The foreign ministries of both countries and Venezuela's oil ministry did not respond to Reuters' request for details regarding the status of relations between the countries. Last month, Venezuela's oil minister said that the country's oil company has learned to cope with sanctions and, with qualified workers and improved operational facilities, is better prepared to deal with any scenario. Issues such as a lack of oil tankers, frequent power outages at export terminals, and the low quality of crude oil produced by Venezuela's state oil company have forced Caracas to expedite the completion of contractual obligations with the Iranian side. In recent months, following a reduction in U.S. sanctions, Caracas has increasingly prioritized its oil sales to other countries and reduced its exchanges with Iran. Shahram Khaledi: The agreement between Iran, Venezuela, and Syria continues the parasitic existence of these governments. The Venezuelan government is seeking to attract the opposition leader of the country; Juan Guaido: This is harassment. Venezuela's oil exports increased following the reduction of U.S. sanctions in 2023. China's business from Iran's sanctions; a $300 million monthly discount for selling oil to China. Reuters: The clearance of Iranian and Venezuelan oil shipments has begun in Shandong, China.