Iran Is Increasing Its Influence in Venezuela. Watch Out, U.S.

S ince the fall of 2020, I have been writing about the growing relationship between the Venezuelan regime of Nicolás Maduro and Iran’s theocracy — formerly headed by Hassan Rouhani, now by Ebrahim Raisi.

At the time, I explained how the Iranians were helping the Maduro regime circumvent American energy sanctions, and how in exchange, they were asking for greater control over Venezuela’s oil industry and other of its key strategic economic sectors.

This month, two episodes have illustrated the evolution of this anti-American and authoritarian relationship. These cases also confirm that the United States’ national security — and the region’s security as a whole — is diminished by Iran’s greater leverage and influence in Venezuela.

The first episode occurred in Buenos Aires, when the Argentinian government seized a Venezuelan Boeing 747 cargo plane. According to Argentina’s security minister, Aníbal Fernández, the plane was seized because his government had received information from “foreign intelligence agencies” that some crew members were linked to the Quds Force of the Revolutionary Guard of Iran. The Quds Force has been listed as a terrorist organization by the U.S. government since 2007. The Argentinian government therefore seized the passports of the 19 crew members, five of them of Iranian nationality.

This plane is the property of Emtrasur, a subsidiary of the Venezuelan airline company Conviasa, which is currently sanctioned by the United States Treasury’s Office of Foreign Assets Control. However, it is now known that this Boeing 747 was formerly owned by Iran’s Mahan Air, a company sanctioned by the U.S. government for allegedly cooperating with the Quds Force and for transporting military equipment on civil flights.

The second episode concerning these two countries occurred in Venezuela, when an Iranian oil tanker arrived transporting roughly one million barrels of light crude to be processed in Venezuela’s refineries. Under U.S. sanctions, all foreign companies are prohibited from doing this kind of transaction with the Venezuelan state and its oil company, PDVSA.

However, unlike in our first report about these illicit transactions in 2020, this time the Iranian shipments to Venezuela were not hidden by the authorities. In fact, Iran’s state-controlled media reported last week that this is their third shipment to Venezuela in the last month. This is clear evidence that the American energy sanctions on both Venezuela and Iran not only are not working, but are not even being respected or feared anymore.

And this is not a situation exclusive to these two regimes. China also violates the U.S. sanctions systematically by purchasing at a discount most of the Iranian and Venezuelan oil supply. China does this through a series of phantom companies without any track record of oil trading. These companies serve as intermediaries between these sanctioned countries and China’s state-owned oil conglomerate, the China National Petroleum Corporation. Through this mechanism, China is buying most of the oil produced in Venezuela.

This whole situation proves that the U.S. policy of sanctions has not been handled properly. To be effective, sanctions have to be systematically monitored, actively adjusted, and applied in a timely and coordinated manner. This way, policymakers can be sure that the sanctions are indeed serving their original policy objective. If sanctions are not applied in this manner, they fail. Even worse, they produce unintended political, economic, and geopolitical consequences.

In the case of Venezuela specifically, U.S. policymakers should have acknowledged that the sanctions were creating fuel shortages in Venezuela (given the country’s mismanagement of the oil sector and, therefore, its collapsed domestic fuel production). They should have seen then that this situation was pushing Venezuela into Iran’s arms, as Tehran was offering an illicit but immediate solution to Caracas’s fuel crisis. In order to avoid this, the U.S. Treasury should have issued an exemption to the sanctions: An exemption allowing foreign companies to sell fuel to Venezuela, or at least to participate in oil-for-gas swaps with PDVSA. This was my proposal back in October 2020.

However, this policy was never followed. As a result, Iran now has a very valuable partner in South America. In fact, just this month, the two countries signed a 20-year “cooperation road map” aimed at strengthening ties in energy, science, and technology, among other “strategic” sectors.

“The Islamic Republic of Iran’s foreign policy has always been to have relations with independent countries, and Venezuela showed that it has had incredible resistance against threats and sanctions by enemies and imperialism,” Raisi said, sitting next to Maduro.

“The successful experience of the two countries has shown that the only way to counter the heavy pressures and hybrid war of the U.S. is to stand up against it and resist,” Raisi told Maduro.

Ultimately, this is a situation that has to be followed and addressed by the State Department and the National Security Council, because if there’s one thing that should be learned from Russia’s invasion of Ukraine, it is that authoritarianism is on the rise — and we cannot just stand on the side and do nothing about it. Now is the time to wake up and put an end to two decades of democratic recession.