A tanker chartered by the National Iranian Oil Company (NIOC) is loading Venezuelan crude for export as the two countries apply new tactics to expand their trade in defiance of US sanctions, a report says.
Venezuela and Iran have deepened their cooperation this year, exchanging gold and other commodities for food, condensate and fuel because the US sanctions do not allow them to use the dollar-dominated financial system.
According to documents from Venezuela’s state-run PDVSA, a very large crude carrier (VLCC) arrived at Venezuela’s main oil port of Jose last week to load 1.9 million barrels of heavy Merey 16 crude bound for Asia.
Iran sent a VLCC named the Horse to Venezuela in September. It delivered condensate, a very light form of oil, for PDVSA to blend with its very heavy oil to formulate exportable crude.
The tanker returned to Iran in October carrying Venezuelan heavy oil for NIOC, PDVSA’s schedules cited by Reuters showed.
In the run-up to leaving office in January, US President Donald Trump’s administration has tightened sanctions on Iran and Venezuela which are entrenched in their opposition to “American hegemony”.
A handful of PDVSA’s customers that had been allowed to swap Venezuelan oil for fuel under US sanctions had their authorizations suspended in October. But Washington has not intercepted vessels that contribute to the Iran-Venezuela trade after Tehran’s warning of grave consequences.
Smaller Iranian tankers have also delivered gasoline to Venezuela, making several voyages between the two countries since May.
Venezuela’s oil industry is hobbled by US sanctions which have thrown the country – owner of the world’s largest oil reserves – into its worst economic crisis in years.
And with most shipowners and oil traders shunning business with Venezuela for fear of the sanctions, Iran has emerged as the only country helping Caracas bring its refineries back to service and cope with an acute fuel shortage.
In June, Iran also sent a cargo of food to Venezuela to supply the South American nation’s first Iranian supermarket.
Covering an area of 20,000 square meters, the store is selling more than 2,500 Iranian items including foodstuff, clothing, detergents, plastic, disposable products, nuts, and even tractors.
The store ushered in a new era of cooperation between Caracas and Tehran, hailed by political observers as a step in breaking the paradigm of US power to subjugate sovereign countries.
Leading American magazine Foreign Policy has said the US “maximum pressure has not destroyed the Iranian economy, and Tehran is now sharing its lessons in resilience” with the beleaguered Venezuelan government.
Since Iran came under broad economic sanctions in the mid-2000s, Iranian policymakers have repeatedly asserted that the country would respond by adopting a “resistance economy” which would aim to reduce dependency on imports and Western investment.
“The simple fact that Iran, which has faced a broad campaign of sanctions for more than a decade, has recently come to the aid of Venezuela, which has been under concerted sanctions pressure for only a few years, suggests a remarkable degree of economic resilience. When comparing the two economies, the most salient question is not whether Iran will become like Venezuela, but rather whether Venezuela will become more like Iran,” the US publication wrote in September.