As the Maduro administration in Venezuela continues to find ways to circumvent Washington’s unyielding pressure on its oil industry, the authorities in Caracas have disclosed a collaborative initiative with Iran that seeks to put a brake on the huge financial losses which the country has had to endure on account of the US’ squeeze on the country’s economy.
Earlier this month, disclosures emerged regarding contracts between the Maduro administration and one of Venezuela’s biggest benefactors in its battle against sanctions, Iran, regarding the setting up of an Iranian oil refinery in Venezuela, reportedly one of two such refineries that target South America.
Contracts for the construction of the refineries have, reportedly, already been signed between Iran and Venezuela and Uruguay, the second South American nation identified to ‘host’ an Iranian-built refinery. Iran, reportedly, will deliver inputs for those refineries, provide technical and engineering capabilities for the running of the plants, and will hold stakes in the two facilities.
The move by Iran to create extra-territorial oil refineries in South America will almost certainly not go down well with Washington though, in the instance of Venezuela, a new refinery there could represent a dramatic change in the country’s economic fortunes by removing the huge technical and logistical challenges which Venezuela’s refining operations face on account of pressures placed on Washington that make it difficult for Caracas to secure support for its oil-refining operations in the west. For its part, Iran reportedly regards the establishment of oil refineries outside the country as a means through which to strengthen the country’s ties with the rest of the global oil and gas industry and generate more earnings for the country’s wider development plans.
Iran’s interest in Venezuela’s oil sector, a senior government official has reportedly said, extends beyond setting up its own interest in Venezuela. The country is also interested in applying what it says is the country’s “up to date know how and technology” to supporting the upgrading of Venezuela’s already existing oil refineries.
Plans for the strengthening of cooperation between Venezuela and Iran were reportedly exhaustively discussed between the two countries when President Nicolas Maduro visited Teheran back in June.
Iran’s longer term strategic objective in seeking to further deepen ties with Venezuela is believed to be connected to its push to secure access to customers outside of the Middle East and significantly reducing the country’s current expenses associated with its own oil exports.
