Six informed sources reported that "Iran and Venezuela are attempting to repair an oil alliance that began to fray last year after the South American country failed to meet oil swap agreements that boosted crude oil exports and helped alleviate domestic fuel shortages." They stated that "Venezuela is striving to renegotiate dozens of unfinished projects in sectors ranging from agriculture to automobile manufacturing ahead of an upcoming visit by Iranian President Ebrahim Raisi to Caracas in the coming months."
The anticipated return of U.S. sanctions in April on the Venezuelan oil sector could make the alliance with Iran crucial for ensuring the continued operation of the energy sector. Washington temporarily eased sanctions last year after Venezuela pledged to allow competitive presidential elections, which did not occur.
The situation worsened as a review of data and shipping documents from the Venezuelan national oil company (PDVSA) revealed Venezuela's failure to make payments to Iran, a situation exacerbated when the U.S. began issuing licenses in late 2022. Those licenses prompted the state-owned company to redirect shipments originally destined for Iran to cash-paying customers.
In a bid to salvage this partnership, Venezuela is rushing to meet the conditions of a three-year alliance that guarantees hundreds of millions of dollars in swaps and oil contracts. It is also attempting to settle outstanding debts by accelerating the delivery of heavy crude oil and fuel shipments to Iran.
