With oil production at a record low, the Maduro regime has turned to the precious metal to pay for Tehran's services.
° With no more credits from China or Russia, Caracas consolidated in 2020 the reborn relationship with the Iranians, who are in charge of trying to reactivate the country's crippled refineries.
° In the past year, Iranian-delivered cargo ships have brought more than 5 million barrels of gasoline to the Caribbean nation, as well as products for its Megasis supermarket.
° The involvement of entities related to the Revolutionary Guard, declared group terrorist by Washington, makes any gesture towards the Biden Administration difficult.
► The Venezuelan Vice President and the Iranian Vice Minister of Industry inaugurate the Megasis supermarket in Caracas in July 2020 [Gov. of Venezuela].
report SRA 2021 / María Victoria Andarcia [ PDF version].
Venezuela's relationship with extra-Hemispheric powers has been characterised in the last year and a half by the resumption of the close ties with Iran seen during the presidencies of Hugo Chávez and Mahmoud Ahmadinejad. With the financing possibilities provided by China (it has not granted loans to Caracas since 2016) and Russia (its oil interest in Venezuela, through Rosneft, was particularly constrained in 2019 by the Trump administration's sanctions on PDVSA's business) exhausted, Nicolás Maduro's regime once again knocked on Iran's door.
And Tehran, once again encircled by US sanctions, as it was during the Ahmadinejad era, has once again seen the alliance with Venezuela as an opportunity to stand up to Washington, while at the same time reaping some economic benefits in times of great need: shipments of gold worth at least $500 million, according to Bloomberg, are said to have left Venezuela in 2020 as payment for services rendered by Iran. If the credits from China or Russia were in exchange for oil, now the Chavista regime also had to get its hands on gold, as the state-owned PDVSA's production was at an all-time low, at 362,000 barrels per day in the third quarter of the year (Chávez took over the company with a production of 3.2 million barrels per day).
The change of partners was symbolised in February 2020 with the arrival of Iranian technicians to start up the Armuy refinery, abandoned the previous month by Russian experts. Lack of investment had led to neglect of the maintenance of the country's refineries, which was causing severe petrol shortages and long queues at service stations. Iran's attendance would barely manage to improve the refinery status , and Tehran had to make up for this inefficiency by sending in gasoline tankers. Food shortages also provided another avenue of relief for Tehran, which also dispatched ships with foodstuffs.
Gasoline and food
The Venezuelan-Iranian relationship, which without being completely eliminated had been reduced during the presidency of Hassan Rohani, as the latter focused on the international negotiation of the nuclear agreement to be reached in 2015 (known as JCPOA), resumed throughout 2019. In April of that year, the controversial Iranian airline Mahan Air received permits to operate in Venezuela on the Tehran-Caracas route. Although the airline has not marketed the air route, it has chartered several flights to Venezuela despite the closure of territorial airspace ordered by Maduro due to the Covid-19 pandemic. Mahan Air's operations served to transport Iranian technicians who were to be employed in efforts to restart gasoline production at the Paraguaná complex refineries, as well as material necessary for these tasks.
According to researcher Joseph Humire, these and other arrangements were allegedly prepared by the Iranian embassy in Venezuela, which since December 2019 has been headed by Hojatollah Soltani, known for "mixing Iran's foreign policy with the activities" of the Islamic Revolutionary Guard Corps (IRGC). He estimates that Mahan Air would have flown around 40 flights in the first half of 2020.
Similarly, Iran has been sending multiple fuel tan kers to Venezuela to address petrol shortages. The first shipment came in a flotilla of tankers that, in defiance of US sanctions, entered Venezuelan waters between 24 and 31 May, carrying a combined 1.5 million barrels of gasoline. In June, another vessel arrived with an estimated 300,000 barrels, and three others brought 820,000 barrels between 28 September and 4 October. Between December 2020 and January 2021 another flotilla would have carried 2.3 million barrels. To this total of at least 5 million barrels of gasoline should be added the arrival of 2.1 million barrels of condensate to be used as a diluent for Venezuelan extra-heavy oil.
In addition to fuel, Iran has also sent medical supplies and food to help combat the humanitarian emergency the country is suffering. Thus, it is important to highlight the opening of the Megasis supermarket, which is linked to the Revolutionary Guard, an Iranian military body that the Trump Administration included in the catalogue of terrorist groups. The store sells products from brands owned by the Iranian military, such as Delnoosh and Varamin, which are two of the subsidiaries of the Ekta company, allegedly created as a social security trust for Iranian military veterans. The Ekta supermarket chain is subordinate to the Iranian Ministry of Defence and the Armed Forces Logistics, an entity sanctioned by the United States for its role in the development ballistic missiles.
Gold and Saab
This activity is of concern to the US. An Atlantic Council report details how Iranian-backed networks prop up the Maduro regime. Venezuelan oil minister Tareck El Aissami has been identified as the core topic actor behind the illicit network . He allegedly agreed with Tehran to import Iranian fuel in exchange for Venezuelan gold. According to agreement according to the Bloomberg information cited above, the Venezuelan government had delivered to Iran, until April 2020, around nine tons of gold worth approximately 500 million dollars, in exchange for its attendance in the reactivation of the refineries. The gold was apparently transported on Mahan Air flights to Tehran.
The negotiations may have involved Colombian-born businessman Alex Saab, who already centralised much of the Chavista regime's food imports under the Clap programme and was getting involved in Iranian gasoline supplies. Saab was arrested in June 2020 in Cape Verde when his private plane was being refuelled on an apparent flight to Tehran. Requested to Interpol by the United States as Maduro's main front man, the extradition process remains open.
The entities involved in many of these exchanges are sanctioned by the US Treasury's Office of Foreign Assets Control for their connection to the IRGC. The IRGC's ability to operate in Venezuela is due to the reach of network to support Hezbollah, an organisation designated as a terrorist organisation by the United States and the European Union. Hezbollah has successfully infiltrated Venezuela's Lebanese expatriate communities, giving Iran a foothold to grow its influence in the region. These links make it difficult for Caracas to make any gesture that might be attempted to facilitate any de-escalation by the new Biden administration of Washington's sanctions.
