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Iran, Venezuela Discuss Energy Ties, Trade Relations

By Nigar Bayramli February 8, 2024

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Iranian Oil Minister Javad Owji met Venezuelan Foreign Minister Yvan Gil and Oil Minister Pedro Tellechea and other Venezuelan officials during his visit to the Latin American country, on February 4, 2024. / IRNA news agency

Iran and Venezuela discussed enhancing bilateral relations and energy cooperation, as high-ranking officials met during Iranian Oil Minister Javad Owji visit to the Latin American country.

Owji held meetings with Venezuelan Foreign Minister Yvan Gil, Oil Minister Pedro Tellechea and other officials during the visit, Shana News Agency reported on February 4.

They discussed the export of Iran’s technical engineering services, overhaul of extraterritorial refineries, expanding the presence of the Iranian private sector in Venezuela's oil industry, especially in petrochemicals, and investment in the country's oil sector.

The total volume of oil industry trade between Iran and Venezuela has reached nearly $4 billion and Iran aims to raise trade volume to $10 billion and further to $20 billion. The capacities of the Iranian oil industry in the Latin American market have a considerable impact on reducing the pressure of the US sanctions on Tehran.

On February 1, Iran's Foreign Ministry Spokesman Nasser Kanani condemned recent US threats to reinstate sanctions on Venezuela's oil sector following a ban on an opposition presidential candidate.

"Resorting to such actions is a direct interference in the internal affairs of countries and a violation of the United Nations Charter," Kanani said in a statement, adding that the continuation of sanctions by the US would "increase the will and cooperation" of the targeted countries to resist such "interventionist policies".

The threat by the US to reimpose the eased sanctions came after Venezuela's Supreme Court confirmed a 15-year ban on opposition candidate Maria Corina Machado, after she won a primary to become the opposition's unity candidate for the 2024 presidential election.

Iran and Venezuela have been strengthening ties for years, including by working together to evade US sanctions against both countries, especially after the US withdrawal from the nuclear deal (The Joint Comprehensive Plan of Action/JCPOA) in May 2018 and the re-imposition of sanctions on Iran.

In June 2022, Iran and Venezuela signed a 20-year cooperation plan encompassing various sectors such as oil, petrochemicals, defense, agriculture, tourism, culture, refinery repairs, and the export of technical and engineering services. In addition, Iranian and Venezuelan presidents signed 19 cooperation documents and MoUs in industry, mining, agriculture, energy, science, and technology in June 2023.

Iran has reportedly provided assistance in refurbishing some of Venezuela’s largest refineries, despite US sanctions imposed on Venezuela’s state oil company PDVSA. In 2022, Iran sent four shipments comprising 8 million barrels of naphtha to Venezuela, playing a significant role in boosting the country’s oil production. Additionally, in January 2023, Iran delivered a tanker carrying 440,000 barrels of naphtha to Venezuela.

Earlier, in May 2022, the state-owned National Iranian Petroleum Engineering and Construction Company inked a contract worth €110 million to undertake the restoration and reactivation of El Palito, Venezuela’s smallest refinery, capable of processing 146,000 barrels per day.

Iran has also expanded military cooperation with Venezuela in recent years. The Iranian-designed drone Mohajer-2 has been produced in Venezuela as the Arpia drone with Iran's support, since 2012.