Iran and Venezuela on Cooperation Road

Iran and Venezuela recently signed a 20-year agreement that sought to strengthen cooperation in a number of areas – though the focus of the agreement is on bolstering ties in the finance and energy sectors.  The agreement will be closely watched by the West since both countries have been facing US sanctions and have repeatedly lashed out at western imperialism. While Venezuela and Iran share close ties with Russia and China, the agreement sends a strong message that the countries that are part of the Russia-China camp need to have an independent foreign policy and economic vision.

On June 11, 2022, Iran and Venezuela signed a 20-year agreement that aims to strengthen bilateral cooperation between both countries in a number of areas: petrochemicals, defence, agriculture, tourism, and culture. The 20-year “cooperation road map’ agreement was signed by the Iranian Foreign Minister Hossein Amirabdollahian and his Venezuelan counterpart Carlos Faria, in the presence of Iranian President Ebrahim Raisi and Venezuelan President Nicolas Maduro, who was in Iran for a two-day state visit.

Since 2020, Iran has also been helping Venezuela by sending gasoline and equipment for repairing the non-functional refineries of Petróleos de Venezuela (PDVSA), Venezuela’s state-owned oil and natural gas company. While the focus of the 20-year agreement is on strengthening linkages in energy and finance, it also aims to bolster people-to-people links. One important announcement in this context, made during the signing of the agreement, was the commencement of a flight between Tehran and Caracas from July 18, 2022.

Both sides lashed out at western sanctions and referred to the need for jointly fighting against ‘imperialism’ – while alluding to the west. Iranian President Ebrahim Raisi lauded Venezuela for taking on imperialistic sanctions. He also said: “Sanctions and threats against the Iranian nation over the past 40 plus years have been numerous, but the Iranian nation has turned these sanctions into an opportunity for the country’s progress.” Venezuelan President Maduro said: “The future of the world is one of equality and justice and standing up against imperialism. We must build this future together.”

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While the focus of the 20-year Iran-Venezuela agreement is on strengthening linkages in energy and finance, it also aims to bolster people-to-people links.

The agreement comes at an important time. Only a few days earlier, International Atomic Energy Agency (IAEA) Director-General Rafael Mariano Grossi had said that Iran had removed 27 surveillance cameras from its nuclear sites. This had drawn strong reactions from the US and a number of other countries. On Wednesday, June 8, 2022, the 35-nation Board of Governors of the IAEA had also passed a resolution against Iran for not being transparent with regard to its nuclear program pointing to Tehran’s failure to explain uranium traces found at three undeclared sites. The IAEA resolution was supported by 30 countries, while three countries abstained and two countries – Russia and China – voted against the resolution.

The US had also criticized Iran for its decision to remove surveillance cameras and said that the revival of the Joint Comprehensive Plan of Action (JCPOA) (or the 2015 Iran nuclear deal) would become tougher in such a situation and that Iran would get further isolated. According to many analysts, the prospects for reviving the 2015 Iran nuclear deal are dim.

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After the beginning of the Ukraine crisis, the US had shown great urgency vis-à-vis the revival of the Iran Nuclear Deal 2015, and it had also reached out to Venezuela as an alternative source of oil, to keep global prices of oil in check

Tehran has repeatedly stated that even if JCPOA is not revived, it will look for other alternatives. After the withdrawal of the US from the JCPOA, the Iranian ties with China and Russia have strengthened. Iran had signed a 25-year agreement with China in 2021, referred to as a ‘strategic cooperation pact’, and has also been looking to sign a similar 20-year agreement with Russia (which seeks to strengthen economic and security linkages). After the beginning of the Ukraine crisis, the US had shown great urgency vis-à-vis the revival of the Iran Nuclear Deal 2015, and it had also reached out to Venezuela as an alternative source of oil, to keep global prices of oil in check (the US is also supposed to have given the go-ahead to European countries to purchase oil from Venezuela).

There is also talk, that even if the 2015 Iran nuclear deal is not revived, the US may permit Iran to sell oil to keep oil prices in check before US mid-term elections to be held in November 2022. Ever since the Ukraine crisis, Iran has been selling oil to China and other countries although, in recent months, China has reduced its oil imports from Iran. Rather, it is purchasing oil at much cheaper prices from Russia. Many countries are keen to strengthen economic ties with Iran, and Washington can not ignore this fact.

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The agreement has an important message for China and Russia – while Iran and Venezuela may be leaning towards the China-Russia camp, they need to have their own vision for dealing with the turbulent geopolitical and economic landscape.

Finally, both Venezuela and Iran both realize that they can not be totally dependent upon either China or Russia. This agreement is a strong reiteration of the same.

The Iran-Venezuela 20-year agreement will send an important message to the West, especially the US, that the countries facing sanctions are exploring alternatives. The agreement also has an important message for China and Russia – while Iran and Venezuela may be leaning towards the China-Russia camp, they need to have their own vision for dealing with the turbulent geopolitical and economic landscape.

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