The lifting of sanctions on Venezuela threatens oil projects with Iran

According to Energy Press, Iran and Venezuela have had close relations especially in the last two decades. These relations reached a peak especially in Mahmoud Ahmadinejad’s government. However, after the geopolitical energy changes in the world, especially after the Russian attack on Ukraine, the positions of the Americans gradually softened in front of Venezuela, to the point where the American oil companies have started buying oil from this country; A country where Iran and Venezuela have been under the economic and non-economic sanctions of the United States for the past decades. The sanctions imposed on these two countries have caused their main source of foreign exchange and income, i.e. oil sales, to be limited under the influence of the sanctions and have caused many problems for their economy, including inflation, economic stagnation, and a decrease in the value of the national currency.
Following Russia’s attack on Ukraine and Western sanctions against Russia, the price of oil went up, and therefore it was more economical for American oil companies to buy oil from Venezuela than to import oil from other countries. Although former US President Donald Trump had imposed oil sanctions against Iran and Venezuela at the same time, the increase in oil prices caused the next US government – Joe Biden – to turn a blind eye to oil purchases and even investment in the country’s oil industry. A similar pattern of behavior was implemented for Iran, with the difference that America turned a blind eye to Iran’s oil sales to China and some countries, and Iran’s oil sales returned to the JCPOA era in the past two years.
The continuation of OPEC+ restrictive policies, supported by Russia and Saudi Arabia, has kept oil prices high in the world market. For the United States and industrialized countries that seek to control their inflation rate with the policy of increasing interest rates, a higher oil price means that the effect of these policies will be neutralized; For this reason, they overlook the purchase of oil from Venezuela and the reduction of oil sanctions of this country.
Although in April of this year, the United States once again imposed crippling oil sanctions against Venezuela and warned President Nicolás Maduro’s efforts to consolidate his government, but reports show that the oil trade between Venezuela and the United States continues and this issue can be detrimental in the long run. Joint projects between Iran and Venezuela should be completed.

The fate of a big contract

Last year, when Ebrahim Raisi was still alive, he had a trip to Venezuela, and during this trip, 3 oil contracts were signed in the field of reconstruction and renovation of offshore petrochemicals, the development of Jose oil terminal, and the export and equipping of five gas pressure boosting stations.
These 3 contracts included the contract for the reconstruction and renovation of offshore petrochemicals, the contract for the development of the Jose oil terminal in Venezuela and the contract for the export and equipping of five gas pressure boosting stations. and the investment repayment should be done by participating in the sale of the products of this complex.
According to the Venezuelan Jose oil terminal contract, increasing the storage in the Jose oil terminal, completing the storage tanks, upgrading the transmission systems and increasing the loading capacity were announced as the goals of this contract, and the financing of this project was entrusted to the Venezuelan side. It was also announced that an Iranian knowledge-based company, with the support of the Ministry of Oil, would sell oil knowledge-based services to a foreign company for the export contract and equipment of five gas pressure boosting stations.
Of course, there were other negotiations and agreements between Iran and Venezuela regarding the renovation of the 310,000-barrel Kardon refinery, the development of oil fields, and the export of equipment, etc., the details of which are not available.
Earlier, Oil Minister Javad Oji announced the launch of Iran’s first offshore refinery called “El Palito” in Venezuela and refining 100,000 barrels of crude oil from the country’s fields in this refinery. Although these cooperations seem very valuable on the surface, but with Venezuela getting closer to America, projects currently being implemented by Iran may go into a coma.

If the sanctions on Venezuela are lifted?!

In this regard, Morteza Behrouzifar, an expert in the field of energy, told Ilna: “Venezuela is under US sanctions. As soon as the sanctions on this country are lifted, there is no doubt that large international companies will operate in this country, and Iran will be excluded without a doubt.”
Regarding the maneuver of some presidential candidates on Iran’s refinery construction in Venezuela, he said: that Iran invests in the downstream part of the target countries for oil export is a positive action, that is, instead of exporting crude oil, we can produce and export products in these countries, although this Politics is not about now.