The “anti-imperialist” Venezuela, Iran alliance

Published for Orizzonti Politici 

What do the Islamic Republic of Iran and the Bolivarian Republic of Venezuela have in common? Apparently very little. In reality, relations between the two countries, as distant geographically as ideologically, are stronger than ever. Teheran and Caracas have in fact a common enemy, the United States of America. Since George W. Bush decided to impose the first sanctions against the South American state in 2006, the Venezuelan government has found in Iran of the ayatollahs one of its most trusted allies. The latest episode of a long period of collaboration has been the sending of merchant shipments of refined crude oil from Iranian ports to Venezuela, which is crushed by the economic and health crisis.

A long-standing friendship

However, the economic collaboration between Iran and Venezuela has distant origins, preceding the Islamic revolution of 1979. In fact, both countries were among the founding members of the Organization of Petroleum Producing Countries (OPEC) in 1960. The government in Caracas was also among the first to re-establish relations with Tehran following the capitulation of the regime of Shah Reza Pahlavi. The nature of this unique relationship of friendship and cooperation underwent a decisive change with the election to the presidency of Hugo Chavez in 1998. While before Chavez’s advent the link was limited to the oil industry, after the Bolivarian revolution there was a remarkable expansion of contacts between the two presidencies. The relationship of personal friendship between Chavez and Mahmud Ahmadinejad has led to the signing of over 300 commercial agreements between the two countries, concerning the most diverse economic sectors, as well as countless visits of the two leaders to Teheran and Caracas.

The anti-American alliance and the mutual benefit of the Chavez-Ahmadinejad axis

During the early 2000s, the two pariah-states have for years given birth to the most important subversive experiment of the established world order. The alliance, in an anti-U.S. key, was characterized by its nature of mutual benefit. Chavez, committed to exporting the Bolivarian, anti- imperialist and socialist revolution to the rest of Latin America, could take advantage of dense diplomatic and commercial relations with America’s and the West’s number one enemy, Iran, gaining pride and prestige in the eyes of a part of the international community. Hostility towards Washington was therefore the glue between the two countries, accompanied by huge investments and loans from the Middle East that stimulated the growth of the Venezuelan economy.

The support of Ahmadinejad and Ayatollah Khamenei to the Bolivarian revolution, however, cannot be reduced to a mere ideological question. Given Chavez’s influence and charisma in Central and South America, the privileged channel of dialogue with Venezuela represented the starting point for the creation of a wider and more developed network of exchanges and commercial relations with the countries of ALBA (the Bolivarian Alliance for the Americas). Thanks to this, Ahmadinejad’s government has been able to sign trade agreements with Correa’s Ecuador and Evo Morales’ Bolivia, as well as restoring the historic cooperation with Cuba and Nicaragua, which began in the early 1980s. Iran has therefore created a joint development fund with Venezuela, in addition to the foundation of a development bank under EDBI (Export Development Bank of Iran). The two states have also founded a car factory called “anti-imperialist” and several urban development projects. As of 2012, Tehran’s investments and loans to the Venezuelans amounted to the figure of 15 billion dollars.

A first change of course…

2013 marked a turning point. Chavez’s untimely death was followed by the end of the Ahmadinejad era in Tehran. With the election of Hassan Rouhani as president of Iran, the country’s prerogatives changed. Many in Tehran have begun to turn up their noses at the lack of concrete results despite the efforts made in South America. Citing a few examples, the car factory in Venezuela never reached its imagined production targets. In Ecuador, Moreno’s rise to the presidency has realigned the country with American diktat, interrupting the military cooperation and exploitation of natural resources projects that Correa had undertaken with his Iranian counterpart. The same can be said of Bolivia, where projects for the extraction of lithium fell through and where the military academy financed by Tehran was recently closed. In 2010, the air route between Tehran and Caracas, with a stopover in Damascus, was interrupted. Incredibly expensive for the coffers of Venezuela’s national airline, Conviasa, the flight was only active for three years. Some rumors have claimed that the route, little used and with exorbitant prices, actually served to allow Iran to import sanctioned goods, including military equipment.

… followed by the arrival of Donald Trump

The four years of Donald Trump’s presidency have been enough to revive the alliance between the two countries. With the New York tycoon in the White House, American foreign policy has undergone a clear reversal. Iran was effectively plunged into new international isolation, due to the unilateral exit of the US from the nuclear deal and the subsequent reinstatement of international sanctions. This was compounded by Trump’s effort to ensure the normalization of diplomatic relations between Tehran’s historical enemies, the State of Israel, and Sunni countries in the region. Likewise, it cannot be said that Maduro’s government has been spared from the hostility of the American administration. Unconditional support for Juan Guaidó has led to the strengthening of sanctions, causing an economic recession of historic proportions.

Years of mismanagement of refining facilities have led to Venezuela no longer being able to refine the crude oil that abounds in its subsoil, ironically making the country dependent on foreign oil imports. U.S. sanctions have caused an exodus of foreign companies with a base in the country, as in the case of, Rosneft, the Russian state-owned oil company that had to abandon its investments to avoid running afoul of U.S. sanctions.

The increasing international isolation to which the two countries are subjected has therefore led to a renewal of the long-standing cooperation. Beginning in May 2020, Iran launched a gigantic supply operation in favor of Venezuela. Cargo ships loaded with already refined barrels have reached the country, in a plan designed to give relief to a population, the Venezuelan one, tormented by the pandemic crisis and severe economic recession. The five tankers that arrived in Venezuelan ports in early May unloaded about one and a half million barrels, for a sum close to $50 million. The United States reacted by threatening new sanctions, opposed by the firm warning of Teheran and Caracas against any possible form of interference.

Venezuela prepares to learn from Iran

The policy of maximum pressure to which Iran has been subjected has contributed to accelerating the process of economic diversification underway in the Persian country. An economy of resistance, as they call it in Tehran, has been created, focused on the expansion of domestic production and a gradual reduction in dependence on the sale of hydrocarbons. The American attempt to provoke regime change in Venezuela can be said to have failed. Guaidó has seen his consensus plummet from 61% to 28% in the last eighteen months. At the same time, the population is against the sanctions regime imposed by the US, appreciated by the Venezuelan diaspora in Florida but not by those in Venezuela who have been struggling to make ends meet for years. The Iranian cargo could therefore prove to be the first step towards a revisiting of the alliance, with Maduro eager to establish with Rouhani, and with his next successor, the same relationship that Chavez had with Ahmadinejad.