Iran, Venezuela Strengthen Ties in Oil Industry with New Agreements

Javad Owji, Iran’s Oil Minister, and Pedro Rafael Tellechea, his Venezuelan counterpart, signed deals to expand bilateral cooperation in the energy sector.

IRNA reported on April 16 that while visiting Caracas, Javad Owji signed cooperation documents and memoranda of understanding (MoUs) with senior Venezuelan officials aimed at reinforcing bilateral cooperation in both the upstream and downstream sectors of the oil industry.

According to reports, the agreements between Javad Owji and Venezuelan officials aim to develop oil and gas fields, renovate and reconstruct Venezuela's oil refineries, and maximize their production capacity.

As part of the agreements, Iran will offer technical and engineering support, as well as equipment, to aid in the modernization of Venezuela’s petrochemical complexes, loading docks, and oil terminals. Additionally, the two countries have reached deals related to the trade and export of oil, gas condensate, and petroleum products.

In recent years, Iran has established strategic cooperation with its Latin American ally, with bilateral trade between the two countries encompassing industries such as oil, gas, and automotive. Furthermore, since December 2022, Iran has been operating its ocean liners to transport merchants along routes to Venezuela.

Amir Bayat, the marketing deputy head of the Islamic Republic of Iran Shipping Line (IRISL), has stated that Venezuela is an excellent destination for Iranian-made construction materials, petrochemicals, and oil products. He has also encouraged Iranian merchants to utilize the shipping line for exporting these items.

Tehran has been reportedly providing assistance in the renovation of some of Venezuela’s largest refineries, despite sanctions imposed by the United States on Venezuela’s state oil company PDVSA. Iran has sent a total of four shipments, consisting of 8 million barrels of naphtha, to Venezuela in 2022. This product has played a significant role in boosting Venezuela’s oil production. Moreover, in January 2023, Iran delivered a tanker carrying 440,000 barrels of naphtha to Venezuela.

In early January, Iranian President Ebrahim Raisi met with the Venezuelan ambassador, Rafael Silva Aponte, and emphasized the positive outcomes of the “constructive talks” and “good deals” that were achieved between Tehran and Caracas during President Nicolas Maduro's visit to Iran in June 2022.

“Implementation of these agreements can expand bilateral cooperation between the two countries by using the various capacities of the two countries,” President Raisi told the ambassador.

During a meeting in Tehran in June 2022, Iran and Venezuela signed a 20-year cooperation plan, which encompassed cooperation in various sectors such as oil, petrochemicals, defence, agriculture, tourism, culture, the repair of Venezuelan refineries, and the export of technical and engineering services. In May of that year, the National Iranian Oil Engineering and Construction Company signed a contract worth around 110 million euros to undertake repairs on Venezuela's smaller refinery with a capacity of 146,000 barrels per day.