With the collapse of the oil prices and COVID-19 pandemic, the oil sector in Venezuela also severely damaged. At the beginning of this year, Venezuelans were already under the U.S. sanctions. The inflation rate in the country rose to 53,798,500%, and society created alternative currencies to overcome economic burdens.
To solve these problems, the Venezuelan President Nicolas Maduro appointed Tareck El-Aissami as the new oil minister. Maduro also replaced the head of the state oil company PDVSA with Asdrubal Chavez, who is an oil expert and the cousin of former Venezuelan Presiden Hugo Chavez.
The interesting fact about the Tareck El-Aissami is that the United States government offers $10 million rewards for information leading to the arrest or conviction of him. El-Aissami is accused of drug trafficking and providing Venezuelan passports for the Hezbollah army in Lebanon, which is assumed to be linked with Iran. However, he denied all of these accusations. According to analysts from the Financial Times, this relationship enables the Venezuelan government to strengthened ties with Iranians.
Starting from the beginning of this year, the American government gradually increased the pressure on the Venezuelans by applying new sanctions. On February 18, 2020, The United States had imposed sanctions on Rosneft Trading SA to cease the support of the Venezuelan president Nicolas Maduro. The sanctioned company was a subsidiary of Russia’s state-controlled oil company Rosneft, and it had a crucial role in trading Venezuelan oil. Russians managed to handle these sanctions by buying the Rosneft shares through government-owned firms.
The U.S. government also ordered fuel suppliers to stop sending petroleum products to Venezuela. The gasoline prices spiked to $2 per liter. Thousands of Venezuelans immigrated the nearby countries.
Later, the Iranian support on gasoline blendstock and technicians for the operations on Venezuela’s Amuay refinery was protested by the U.S. government. The Americans also asked international support for denying the flights between Iran and Venezuela.
According to the Bloomberg report, the Venezuelans paid Iranian support with gold and planes from Mahan Air, which is an airline in Iran that helped these transactions to complete. Last week the Venezuelan government officials supplied 9 tons of gold, which is equal to $500 million to Tehran for their support to their oil industry.
The Iranians denied operation and claimed that it is another American policy to put international pressure on the Iranian regime and disrupt the Venezuela-Iran relations by harming the trade. However, the decline of Venezuela’s foreign reserve values signals that the money left the country.
Overall, when we sum up all the evidence we have, it is likely that Iran and Venezuela are trying to recover the damage given by the U.S. sanction through cooperation. When we think about the lack of knowledge that Tareck El-Aissami has on the oil sector, we can speculate that his presence in the ministry can be related to other activities that can repair the Venezuelan oil sector. The upcoming days will reveal to us the true motivations of these countries.