May 26, 2020

IntelBrief: Iran and Venezuela Challenge the United States

A Venezuelan oil worker holding a small Iranian flag attends a ceremony for the arrival of Iranian oil tanker Fortune at the El Palito refinery near Puerto Cabello, Venezuela, Monday, May 25, 2020.  (AP Photo/Ernesto Vargas)
  • Iran and Venezuela, both regular targets of Trump administration policy, are teaming up to challenge U.S. policy directly.
  • Iran is sending five tankers loaded with gasoline and petrochemicals to Venezuela to help the regime of Nicolas Maduro cope with its economic difficulties.
  • The shipment represents a renewed Iranian effort to build influence in Latin America.
  • With its options limited, the Trump administration’s response to the shipments has been ineffective.

As of May 25, five Iranian tankers carrying over 1.5 million barrels of gasoline (60 million gallons) and petrochemical products have begun arriving in Venezuela’s territorial waters. The regime of Nicolas Maduro announced that the Venezuelan Navy is escorting the tankers into port. Due to its long term mismanagement, combined with the effects of the COVID-19 outbreak as well as U.S. sanctions, Venezuela is in dire need of the shipments. Even though it is a major oil exporter and member of the OPEC cartel, Venezuela’s domestic refining capacity has collapsed to 10% of its former output, and it has been forced to ration supplies of gasoline to the population. In addition to sending the gasoline and petrochemicals, Iran recently airlifted Chinese-made refinery equipment to Venezuela to help the national energy company Petroleos de Venezuela (PDVSA, ‘pedevesa’) repair its dilapidated refining infrastructure.   

The shipment represents joint action by Iran’s leaders and the Maduro regime to directly challenge Trump administration policy, which consists largely of imposing strict sanctions on both countries. The shipment violates U.S. sanctions on Iranian energy exports, as well as sanctions on transactions with Venezuela.  U.S. policy is openly intended to bring down Maduro in favor of elected parliament leader Juan Guaido, who the administration claims is the rightful leader of Venezuela. The stated intent of the U.S. campaign of ‘maximum pressure’ on Iran is to compel Iran to end its support for regional armed factions, although many experts suspect that the Trump administration implicitly seeks to bring down Iran’s Islamic regime entirely. Under its previous president, Mahmoud Ahmadinejad, Iran had cultivated close relations with the government of then-president of Venezuela Hugo Chavez, who was similarly an antagonist of the United States. Iran had largely abandoned its ties to Venezuela while it pursued a new relationship with the United States and is allies in the form of the 2015 multilateral nuclear deal. The Trump administration’s abrogation of the nuclear deal in 2018 removed Iran’s incentive to exercise restraint, and instead caused Tehran to return to its earlier policies of interfering in the Western Hemisphere. Elsewhere in Latin America, Iran-backed terrorist attacks in Buenos Aires in 1992 and 1994 destroyed Israel’s embassy and a Jewish cultural center there, respectively. 

U.S. options to counter the new Iran-Venezuela challenge appear to be limited.  The U.S. Navy has recently augmented its Caribbean presence to guard against drug trafficking, but U.S. military officials said they were ‘not aware’ of any U.S. planning to intercept, search, or seize the Iranian ships. U.S. sanctions laws and international law do not provide for such seizures, but only for sanctions against the entities involved in the shipments. Yet, all Iranian and Venezuelan companies engaging in the transaction are already sanctioned by the United States - including the Iranian state-owned tanker companies, PDVSA, and the Iran-owned Mahan Air that was used to ship parts to Venezuela. 

U.S. officials have issued worldwide guidance to foreign port operators not to cooperate with the shipments, and offered rewards to ship crew that might help the United States impound such cargo, but no efforts to cooperate with the U.S. overtures have been noted. The successful delivery of the gasoline helps the Maduro regime forestall further economic collapse at a time when its opponents have already been weakened by missteps such as failed coup plots. For Iran, the shipment illustrates that the Islamic regime can directly challenge the United States, in its own hemisphere, by propping up a regime that the Trump administration has made as big a target, if not bigger, than Iran itself.  


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