Iran, Venezuela strike oil deal, flouting US sanctions

The two embattled nations seek to flout U.S. sanctions that have crippled their economies.

By World Israel News Staff

Iran and Venezuela are gearing up for an oil exchange deal, as the two embattled nations seek to flout U.S. sanctions that have crippled their economies.

State-owned companies Petroleos de Venezuela (PDVSA) and National Iranian Oil Company (NIOC) are planning their first swap for this week, Reuters reported.

Venezuela will provide Iran with its heavy, raw oil in exchange for Iranian condensate which will provide a major quality boost to its crude.

The initial phase of the deal is set to last six months, sources told Reuters, although other details about the agreement were not made public.

The Iranian and Venezeulan oil ministries did not comment on the report.

A U.S. Treasury spokesperson told Reuters that the authority was “concerned” about the deal, but could not confirm or deny anything about the agreement.

The deal could potentially serve as a financial lifeline for the two nations, who have struggled under the crushing economic sanctions imposed by former president Donald Trump.

In 2020, the Trump administration seized more than 1 million barrels of Iranian fuel bound for Venezuela and blacklisted five tanker captains involved in the shipment.

American sanctions on Iran don’t just apply to U.S. citizens or corporate entities doing business with Iran.

Even non-U.S. entities can face serious punitive measures from the American government for violating the sanctions, U.S. Treasury officials wrote in an email to Reuters.

“We will continue to enforce both our Iran and Venezuela-related sanctions,” the spokesperson said.

The American government “has demonstrated its willingness” to penalize entities that engage with Iran, arguing that any and all business agreements with the Islamic Republic “further enable their destabilizing behavior around the world.”

“Transactions [with sanctioned countries] by non-US persons are generally subject to secondary sanctions,” the Treasury said, adding that it “retains authority to impose sanctions on any person that is determined to operate in the oil sector of the Venezuelan economy.”