Iran’s President Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian recently met Venezuelan Foreign Minister Felix Plasencia Gonzalez in Tehran during his official visit to the country. The foreign ministers discussed bilateral relations and ways to improve cooperation. Abdollahian announced that both countries in the coming months will work to lay the foundations for a 20-year cooperation treaty. Gonzalez’s visit and the statements issued by the Iranian government indicate the convergence of interests given that both countries face US threats and sanctions. This report will review the significance of this visit, forecast its impact on future interactions between the two countries, and identify Iran’s motivations for persisting with this relationship despite the crises facing Venezuela.
Venezuela has been experiencing a severe economic crisis and it needs to boost its oil exports. Venezuela’s Petroleos de Venezuela (PDVSA), a state-owned oil and gas company, along with Iran’s National Iranian Oil Company (NIOC) have agreed to expand collaboration to counter the impact of US sanctions on their oil trade. Due to years of mismanagement and corruption, PDVSA has not been able to independently refine its heavy crude oil, and last year the Venezuelan government sought help from Iran to fix some of its oil refineries on the Paraguaná peninsula. Venezuela worked out a gold-for-gas deal with Iran and some reports suggested that Tehran took 9 tonnes of gold bars worth approximately $500 million as a form of payment from Venezuela. Last month, several reports indicated that Iran and Venezuela had started the barter exchange, with 2.1 million barrels of Iranian gas condensate transferred to Caracas.
Many Iranians have questioned Tehran’s planned 20-year cooperation treaty with Venezuela, particularly in light of Venezuela’s political crisis. During Abdollahian’s recent visit to Russia, he expressed interest in a similar strategic treaty with Moscow. Iran intends to project its diplomatic weight through signing such treaties and prove to the world that the Trump administration’s maximum pressure campaign against it is a failure. President Raisi had earlier said, “Iran and Venezuela have common interests and common enemies, and we have always shown that, with resistance and wisdom, we can thwart the plots of the United States and global imperialism.” Iran only has a handful of regional and global trading partners and its major clients like South Korea, India and Japan stopped importing oil from it because of US sanctions. Venezuelans have also communicated their concerns over the pricing of Iran’s oil. A member of the Venezuelan Petroleum Workers Union said that Iran is taking advantage of the country’s crisis and charges it 20 times more than the cost price. The future of Iran’s interactions with Venezuela revolves around three major considerations. Firstly, Venezuela’s strategic geographical location allows Iran to put pressure on Washington, especially as bilateral relations have expanded to the security sphere. Secondly, even though Iran has increased its exports in the last couple of years, a major percentage of its profits is lost to themiddlemen who help in Tehran’s illicit trade, particularly the sale of oil to countries like Venezuela.In light of this, Iran is prioritizing direct interactions with Venezuela through signing bilateral treaties, thus cutting out intermediaries.Thirdly, Venezuelan President Nicolas Maduro has expressed interest in buying missiles and weapons from Iran and Tehran has also been keen on increasing its defense exports beyond the Middle East. Recently, a group of hackers in Venezuela broke into the country’s Directorate General of Military Counterintelligence which revealed information regarding purported Hezbollah operatives living in the country with the full protection of the Maduro government. Previous reports indicated strong cooperation between former Venezuelan intelligence officials and Hezbollah operatives in the trafficking of arms, drugs, and money laundering.
The recent remarks of Iran’s foreign minister indicate that Venezuela will be a key focus for Tehran over the coming years. As the nuclear talks remain stalled, Iran continues to be assertive in its foreign policy approaches, and the Biden administration has failed to take strong steps against Tehran’s illicit networks and activities in South America but it is monitoring the situation closely in Venezuela and the evolving relationship between Tehran and Caracas. Considering the present geopolitical realities, Iran and Venezuela will likely deepen their interactions via long-term cooperation treaties and build on their mutual anti-American sentiments.