President Hassan Rouhani’s economic romance with Nicolas Maduro: Hostile interference in the Caribbean

  • + Rosneft’s departure led Maduro to declare an “Energy Emergency”. 
  • + Desperate Maduro found in his lifelong supporter, Rouhani, a safe haven.
  • + Second Iranian oil tanker reaches Venezuela
Miraflores Palace (Reuters) RadioFreeEurope RadioLiberty

Why is Trump hostile to Maduro and Rouhani?

Ever since Trump recognised the National Assembly of President Juan Guaidó, as interim President of Venezuela, the country has been torn apart between the supporters and opponents of Maduro. The ailing socialist state leader, Maduro, has been accused by his entanglements with narco-terrorism, cooperation with las FARC and “widespread human rights abuses”. Trump has repeatedly said that his government is helping Venezuela “as much as we can” so that the country can solve its financial and political crisis, hence completely opposing Maduro’s regime. However, the Trump Administration has imposed severe economic sanctions on oil companies that trade with Venezuela; constricting their economy even more.

Trump’s aim is to ensure that Maduro does not continue profiting from state-operated oil operations, that enables him to commit the human atrocities he is being accused of. The turning point came with the departure last March of Rosneft, Venezuela’s main customer. Until that moment, the Russian oil firm served to counterbalance the effects of US sanctions on Venezuela’s PDVSA. However, their withdrawal froze the country’s main economic actor, PDVSA, creating an “energy emergency.” At the same time, tensions have also been escalating between Trump and President Hassan Rouhani of Iran, after the predictable move, two years ago, of Trump’s withdrawal from the Iran Nuclear Deal of 2015. Trump claimed that he wanted to apply “maximum pressure” on the government in Tehran to compel it to renegotiate the accord. Same as in Venezuela today, that measure led to financial contraction and a steep fall in oil exports.

What does the US want? 

In short, to remove Maduro. The US used sanctions to firstly, prevent foreign oil companies trading with Venezuela and secondly, to ban US firms that exported chemical diluting chemicals. Eventually, this would worsen the economic situation in Venezuela, a country which would desperately be calling for a change of leadership. But, how come that one of the oil richest countries in the world is so dependent and influenced by US policies? 

Today, Venezuela continues to have large sources of oil and this finite resource accounts for almost all of its export earnings. Over the past decade US, India and China were its biggest customers. Maduro’s dependence on international markets is triggered by the fact that Venezuela’s heavy crude oil is almost solid;” this means that it needs to undergo chemical processes that would make it more liquid, enabling it to pass through pipelines and eventually to the gas stations. This makes the Chavista government completely dependent on the import of those chemicals, such as naphtha, that will help dilute the crude oil that comes out of the ground. As a result, the sanctions imposed by the Trump administration prevented Venezuela from trading their only financial source of income. Consequently, 10 million barrels of oil sat in Venezuela simply waiting for new buyers to come.

What is Maduro trying to achieve?

US sanctions left Maduro in desperate need to regain control of oil exports and avoid economic meltdown to continue to be praised as leader of Venezuela. Given Rouhani’s and Maduro’s shared complaint against the unilateral coercive measures imposed arbitrarily by the Trump administration, both authoritarian Presidents agreed to strengthen their cooperation ties. On the one hand, this has given a free pass to Rouhani into the Caribbean sea, basically enabling him to step in the US’s backyard. On the other hand, Maduro has already received from its Middle Eastern ally, the two out of five Iranian oil tankers carrying more than a million barrels of fuel. This will prevent Venezuelan citizens from queuing up all night to obtain several litres of petrol. Overall, this romance undermines the sanctions imposed by the US, presenting an international humiliation for Trump. 

Who is winning and what about you?

Rouhani’s support in Venezuela is vital for the economic stability of the country. Rouhani has already stated that “Iran will never initiate a conflict” and hopes that “the Americans will not commit an error.” This statement places the US as the enemy to Venezuelans, as its priority is to bring down Maduro at the expense of 20 million starving Venezuelans. Rouhani is playing the role of the saviour to the poor people of Venezuela and he is claiming that Iran is acting with a solemn peaceful intention. Though, this is very worrying. We must not forget the events of January, where Iran almost got into a full-blown conflict with the United States. The Iranian presence on Venezuelan soil is not authorised by the opposition-controlled National Assembly headed by Juan Guaidó and supported by the US. Therefore this amicable relationship between these two heads of state poses a direct hostile threat to the US. However, the conclusion that we arrive at is that the US’ economic sanctions have brought Iran into their sphere of influence, it is not the fault of Iran. Iran now has the upper hand, as it is just trading with a country for liquid oil in exchange for gold, it is not seeking war. Nevertheless, looking at the speculations of a third-world war between Iran and the US a few months back, their presence now in America’s makes this more probable than never. 

Berta Pereda Asencio

Research & Analysis Intern