Robert HARNEIS -TDO- (FRANCE)- The arrival of three Iranian tankers has eased Venezuela’s gasoline shortages.
Venezuela has a gasoline shortage itself because of US sanctions. Venezuela’s own oil is largely incompatible with its refineries, so historically they’ve exported oil, and brought other oil back for refining. The US has tried to prevent this, and seized ships carrying oil purchased from Iran in third party vessels. Washington has, however, so far not interfered with Iranian flagged ships for fear of retaliation in the Gulf region and probably also for reputational reasons. The US has also stopped the sale of the additives necessary to convert local oil to gasoline.
Major shortages have been reported across Venezuela recently. This is a problem across the country, but especially in the farming sector, where food production is reduced as a result.
Iran, as a fellow victim of US sanctions, is happy to bolster Venezuelan ties. Currently the US is trying to stop Iran selling its oil with mixed success. Each side has little to lose trading gold for oil.
In July, the US seized an estimated 1.1 million barrels of Iranian sourced fuel on four privately owned tankers that were bound for Venezuela. That fuel was then transferred to two tankers, the Maersk Progress and the Euroforce. The US government claimed that the oil was ‘Iranian’ but it would seem it was already owned and paid for by Venezuela.
It is not clear exactly how the US seized the fuel shipments. With US sanctions on Venezuela specifically targeting the maritime industry, it is thought the shipowners were threatened with the loss of registration or insurance, which could have been enough for them to comply and sail to a US port.
In August 2019 Wison Engineering Services Co. Ltd., a Shanghai-based chemical engineering and construction company, agreed to repair Venezuela’s main refineries in exchange for oil products including diesel.
The move to modernize the country’s derelict refining network and adapt it to produce more gasoline locally could eventually neutralize the US attempts to undermine the Venezuelan government of President Maduro.