Rebuilding Partnerships
Venezuela Looks to Build Ties with Iran as U.S. Sanctions are Imposed
By Felipe Sigaud, Staff Writer
Venezuela is racing to meet obligations under a three-year-old pact, which has involved hundreds of millions of dollars in oil trades to save the agreement that they had with Iran. The country is attempting to pay outstanding debt by sending much larger petroleum and oil shipments to Iran at a much faster pace.
“Despite encountering challenges, particularly in terms of payments by Venezuela, both nations remain resolute in their commitment to fortify their relationship and enhance their energy partnership in the face of American pressure,” an Iranian official said to Reuters.
The oil problem has become serious as the shipping data and papers from PDVSA, the main oil firm from Venezuela, reveals the country has fallen behind in payments to Iran, due to the licenses issued by the United States which began in late 2022.
In 2021, when the first deals were made between both countries, Venezuela was supposed to provide government-owned companies with a minimum of two barrels of oil, for each barrel received. When Venezuela’s main company, PDVSA, fell behind, Iran stopped shipping cargo to the nation, until they came to a new agreement that demanded Venezuela a large shipment of heavy crude oil to Iran monthly. In February, Pedro Tellechea, Venezuela’s oil minister, recognized the fragile ties and declared that PDVSA will carry out its own petrochemical plant and refinery maintenance this year.
“Everything related to Iran has faded. We only see companies authorized by the U.S. to do business in Venezuela,” said a refinery worker to Reuters. “Some imported spare parts are arriving, but they are American.”
As part of the agreement between Venezuela and Iran, the Iranian state-owned refiner NIORDC was also given the responsibility of renovating PDVSA’s enormous 955,000 barrels per day, the Paraguana Refining Center.
This project, which never went forward, included training for Venezuela’s technicians in Iran, temporary housing for Iranian technicians in Venezuela and an ideal budget planning to be able to renovate and change old equipment.
