US Southern Command highlights Iranian interest in consolidating Hezbollah's intelligence and funding networks in the region

• Throughout 2019, Rosneft tightened its control over PDVSA, marketing 80% of production, but US sanctions forced it to leave the country.

• The arrival of Iranian Revolutionary Guard troops comes amid a US naval and air deployment in the Caribbean, not far from Venezuelan waters.

• The Iranians, once again beset by Washington's sanctions, return to the country that helped them circumvent the international siege during the era of the Chávez-Ahmadinejab alliance.

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▲ Nicolás Maduro and Iranian President Hassan Rouhani at a meeting in Tehran in 2015 [Hossein Zohrevand, Tasnim News Agency].

report SRA 2020 / Emili J. Blasco [PDF version].

financial aid In a short period of time, Venezuela has gone from depending on Chinese loans to relying on the Russian energy sector (as was particularly evident in 2019) and then to asking for the help of Iranian oil technicians (as was seen at the beginning of 2020). If the Chinese public loans were supposed to keep the country running, Rosneft's aid was only intended to save the national oil company, PDVSA, while the Iranian Revolutionary Guard's financial aid only aims to reactivate some refineries. Whoever assists Venezuela is getting smaller and smaller, and purpose is getting smaller and smaller.

In just ten years, China's big public banks granted 62.2 billion dollars in loans to the Venezuelan government. The last of the 17 loans came in 2016; since then Beijing has ignored the knocks Nicolás Maduro has made on its door. Although since 2006 Chavismo had also received credits from Moscow (some $17 billion for the purchase of arms from Russia itself), Maduro turned to pleading with Vladimir Putin when the Chinese financial aid ended. Unwilling to give any more credit, the Kremlin articulated another way of helping the regime while ensuring immediate benefits. Thus began Rosneft's direct involvement in various aspects of the Venezuelan oil business, beyond the specific exploitation of certain fields.

This mechanism was particularly relevant in 2019, when the progressive US sanctions on Venezuela's oil activity began to have a major effect. To circumvent the sanctions on PDVSA, Rosneft became a marketer of Venezuelan oil, controlling the marketing of most of the total production (between 60 and 80 per cent).

Washington's threat to punish Rosneft also led the company to shift its business to two subsidiaries, Rosneft Trading and TNK Trading International, which in turn left the business when the US pointed the finger at them. Although Rosneft generally serves the Kremlin's geopolitical interests, the fact that it is owned by BP or Qatari funds means that the company does not so easily risk its bottom line.

The departure of Rosneft, which also saw no economic sense in continuing its involvement in reactivating Venezuela's refineries, whose paralysis has plunged the country into a generalised lack of fuel supply to the population, left Maduro with few options. The Russians abandoned the Armuy refinery at the end of January 2020, and the following month Iranians were already trying to get it up and running again. Within weeks, Iran's new involvement in Venezuela became public: Tarek el Assami, the Chavista leader with the strongest connections to Hezbollah and the Shia world, was appointed oil minister in April, and in May five cargo ships brought fuel oil and presumably refining machinery from Iran to Venezuela.

The supply did not solve much (the gasoline was barely enough for a few weeks' consumption) and the Iranian technicians, at least some of them led by the Revolutionary Guard, were unlikely to be able to fix the refining problem. Meanwhile, Tehran was getting substantial shipments of gold in return for its services (nine tonnes, according to the Trump Administration). The Iranian airline Mahan, used by the Revolutionary Guards in their operations, was involved in the transports.

Thus, suffocated by the new outline sanctions imposed by Donald Trump, Iran returned to Venezuela in search of economic oxygen and also of political partnership vis-à-vis Washington, as when Mahmoud Ahmadinejad allied with Hugo Chávez to alleviate the restrictions of the first sanctions regime that the Islamic nation suffered.

US naval and air deployment

Iran's "interference" in the Western Hemisphere had already been mentioned, among the list of risks to regional security, in the appearance of the head of the US Southern Command, Admiral Craig Faller, on Capitol Hill in Washington (in January he went to the Senate and in March to the House of Representatives, with the same written speech ). Faller referred in particular to Iran's use of Hezbollah, whose presence on the continent has been aided by Chavismo for years. According to the admiral, this Hezbollah-linked activity 'allows Iran to gather intelligence and carry out contingency planning for possible retaliatory attacks against the United States and/or Western interests'.

However, the novelty of Faller's speech lay in two other issues. On the one hand, for the first time the head of the Southern Command placed China's risk ahead of Russia's, in a context of growing rivalry between Washington and Beijing, which is also manifested in the positioning of Chinese investments in strategic infrastructure works in the region.

On the other hand, he announced a forthcoming 'increased US military presence in the hemisphere', something that began to take place at the end of March 2020 when US ships and aircraft were deployed in the Caribbean and the Pacific to reinforce the fight against drug trafficking. In the context of its speech, this increased military activity in the region was understood as a necessary notice towards extra-hemispheric countries.

"Above all, what matters in this fight is persistent presence," he said, "we have to be present on the field to compete, and we have to compete to win. Specifically, he proposed more joint actions and exercises with other countries in the region and the "recurring rotation of small special operations forces teams, soldiers, sailors, pilots, Marines, Coast Guardsmen and staff National Guard to help us strengthen those partnerships".

But the arrival of US ships close to Venezuelan waters, just days after the announcement on 26 March from New York and Miami of the opening of a macro-court case for drug trafficking and other crimes against the main Chavista leaders, including Nicolás Maduro and Diosdado Cabello, gave this military deployment the connotation of a physical encirclement of the Chavista regime.

That deployment also gave some context to two other developments shortly thereafter, offering misleading readings: the failed Operation Gideon on 3 May by a group group of mercenaries who claimed they intended to infiltrate the country for Maduro (the increased transmission capabilities acquired by the US in the area, thanks to its manoeuvres, were not used in principle in this operation), and the arrival of the Iranian ships at the end of the month (the US deployment raised suspicions that Washington could intercept the ships' advance, which did not happen).