Iran and Venezuela Deepen Their Strategic Alliance

Iranian President Ebrahim Raisi just wrapped up a two-day visit to Caracas, during which he consolidated Iran’s strategic alliance with the regime of Nicolas Maduro. While talk of American imperialism and a new multipolar world order dominated the trip’s narrative, the agreements reached reveal deeper coordination and mutual assistance between Tehran and Caracas in their joint effort to evade U.S. sanctions.

Iran and Venezuela signed 25 memorandums of understanding (MOUs) to promote cooperation in multiple fields covering five key areas: energy, trade, industrial development, culture, and scientific research. These MOUs are part of a 20-year cooperation agreement the two nations sealed last year during Maduro’s visit to Tehran.

Both countries’ energy sectors are under U.S. sanctions. Their cooperation agreements aim to evade those sanctions and minimize their impact. Venezuela is relying on Iran’s National Iran Oil Refining and Distribution Company (NIORDC) to upgrade its refineries using both Iranian technology and Chinese-made components to replace degraded U.S.-made parts. As Iran’s oil minister Jawad Owji announced, Iran has supplied 2.8 million refinery spare parts in the last 20 months. Iran is also operating its own refinery in Venezuela and assisting Venezuela’s petrochemical sector pursuant to the MOUs. Venezuela’s efforts to circumvent sanctions also depend on a contract with SADRA, Iran’s U.S.-sanctioned shipping manufacturer, to build four new Aframax-size oil tankers, two of which have already been delivered. Thanks to the agreement, Venezuela’s oil company, PDVSA, can upgrade its aging tanker fleet.

Trade has also taken center stage. The two regimes announced the launch of a joint maritime shipping company, where the Iranian partner will be the state-owned (and U.S.-sanctioned) Islamic Republic of Iran Shipping Lines (IRISL). They also signed an MOU in the area of maritime ports cooperation. The agreement comes on the heels of the recent announcement by IRISL of the opening of new shipping routes linking Iran to Venezuela. Additionally, Maduro expressed hope that direct flights between Caracas and Tehran will increase their frequency from weekly to daily. Venezuela and Iran have used these passenger flights to move cargo, transporting parts for Venezuela’s refining industry. Other agreements cover the agricultural and animal husbandry sector, with Iran opening its meat market to Venezuela.

Other MOUs cover the telecommunications, innovation, and pharmaceutical sectors, including the establishment of scientific parks in Venezuela, along with the mining sector. Venezuela has vast reserves of coltan, a rare earth mineral vital to advanced electronics, as well as gold and uranium, whose extraction has wreaked havoc on fragile ecosystems and runs through a black market. Gold has been a key ingredient of the two countries’ illicit financial schemes for the purpose of evading sanctions and funding terrorism. If Iran were to enhance Venezuela’s extraction capacity, it would significantly upgrade the two regimes’ ability to fight sanctions.

Finally, the two countries established cultural and academic exchanges, including scholarships for Venezuelan students at Iran’s scientific universities, a further step to bring Venezuela’s future elites within Iran’s orbit.

Washington needs to take stock of these changes and recognize that, unless its sanctions programs step up enforcement and adapt to these changing circumstances, their effectiveness will diminish.

Emanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies (FDD), where he contributes to FDD’s Iran Program and Center on Economic and Financial Power (CEFP). For more analysis from Emanuele, the Iran Program, and CEFP, please subscribe HERE. Follow Emanuele on Twitter @eottolenghi. Follow FDD on Twitter @FDD and @FDD_Iran and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research organization focused on national security and foreign policy.