Venezuelan Politics and Human Rights

Independent, Reality-Based Analysis

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Venezuela and Iran

I have received a number of questions from journalists about the relationship between Venezuela and Iran, spurred by the presence of Iranian President President Ahmadinejad. Below I am going to append some paragraphs from my book manuscript that can provide some background.

Of all of Venezuela’s international relationships, the one that most disturbs the world diplomatic community is the relationship with Iran. The apparent cultural and geographical distance between Venezuela and Iran frequently leads commentators to infer that the relationship has been explicitly developed to raise the hackles of the US and Western European countries. However, closer analysis shows the strangeness and newness of this relationship to be only apparent. 

Venezuela and Iran have had diplomatic relations since 1947 and collaborated in the creation of OPEC in 1960. The Shah of Iran made a state visit to Venezuela in 1975, and Carlos Andres Pérez made a state visit to Iran in 1977. Since Chávez has been in office, he has visited Iran eight times. Iranian President Jatami visited Venezuela four times, and President Ahmadinejad has come to Venezuela five times, including January 2011. Within OPEC Iran and Venezuela both have an interest in maximizing revenue by maintaining prices high and production low. The form a natural alliance against Saudi Arabia which benefits more from high production. Venezuela and Iran are mutually compatible in other ways. Iran offers greater technical and manufacturing capacity, and Venezuela seeks its help in joint ventures. Venezuela also wants Iran to participate in oil exploitation in the Orinoco tar belt. Iran can benefit from Venezuelan refined petroleum and is apparently building three tankers for Venezuela.

However, as explained in Part I of this chapter, in the contemporary period, the relationship goes beyond straightforward economic interests. Iran and Venezuela share a thirdworldist ideology that leads them both to seek to consolidate relationships outside of the industrialized West. Like Venezuela, Iran has sought to build regional alliances with Russia, India, and China, as well as the rest of Latin America. In his October 2010 visit to Tehran, Chávez called cooperation with Iran a “sacred task” in order to fortify “an anti-imperialist” axis.

In 2006, Venezuela and Iran signed 29 agreements—including a bi-national economic fund, refinery, medical equipment, gunpowder, commercial airplanes, agro-industrial equipment, and a shipyard. In 2007, agreements were made to build 10,000 houses, ethanol plants, and a shipyard. But most of these remain in the phase of letters of intention. The commercial relationship with Iran has grown dramatically, but it is still quite small. Commercial exchange with Iran grew from $1 million in 2004 to $79 million in 2010. However, between 2006 and 2009, investment between Venezuela and Iran reached $6 billion.

Of course this is the relationship that has actually led to US sanctions against Venezuela, for not obeying economic sanctions against Iran. In October 2008, the Treasury Department froze the US assets of in the International Development Bank of Venezuela, which is the Venezuelan branch of Iran’s Export Development Bank, three months after the European Union did the same. This bank was the subject of sanctions for doing business with companies involved in Iran’s nuclear program. In May 2011, the State Department imposed sanctions on Venezuela for selling two shipments of reformate, a component used in making gasoline. They chose three relatively toothless sanctions of the twenty they had to choose from. However, this means that if there is another round of sanctions, then they would have to be some of the tougher ones.

In December 2010, stories surfaced in the German daily Die Welt suggesting that Venezuela was allowing Iran to install clandestine missile bases in the Paraguana peninsula on Venezuela’s Northwest coast. Journalists from both Reuters and The Economist looked into the allegations and did not find enough evidence to report on them.

Filed under Iran OPEC

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