Venezuela and Iran Continue to Boost Ties

Iran and Venezuela signed three energy agreements on Sunday during a visit by Venezuelan President Hugo Chávez to the Islamic Republic.

This was the seventh official visit to Iran for Chávez, as Caracas and Tehran continue to strengthen their relationship.

Two of the accords stipulated that Venezuela and Iran will each invest $760 million in the other’s energy sectors. Under the first, state oil company Petroleos de Venezuela SA committed to investing $760 million in Iran’s South Pars phase 12. Under the second deal, Iran agreed to invest the same amount in Venezuela’s Dokobuki oil field.

The third deal is an Iranian attempt to mitigate the risk of new sanctions from the West.

U.S. lawmakers suspect that Iran’s nuclear program is designed to produce nuclear weapons, and are expected to vote on new sanctions targeting Iran’s refined petroleum imports. Although Iran is one of the largest oil suppliers in the world, its lack of refining capacity forces it to import 40 percent of its gasoline. Under the terms of the deal, Tehran will import 20,000 barrels of gasoline from Venezuela each day, worth $800 million, beginning in October.

This brings the total number of energy agreements between the two petroleum economies to more than 35. But there is more to the strengthening ties between Iran and Venezuela than just oil. This relationship is being constructed on a staunch anti-American footing: Both nations consider the United States an enemy. Look for relations between these two to continue to improve. As this occurs, expect Iran and Venezuela to exploit future opportunities to counter American interests, in both the Middle East and South America.