Page 5 - LatAmOil Week 21 2020

LatAmOil COMMENTARY LatAmOil
“Venezuela and Iran want peace and have the right to freely trade in the world’s seas and exchange products,” Maduro declared.
He was speaking after the US Navy sent destroyers and other combat ships to patrol the Caribbean in what officials in Washing- ton described as a counter-narcotics mission. Maduro, along with Oil Minister Tareck El Aissami and other high-ranking Venezuelan officials, have been designated by the US gov- ernment as drug traffickers and wanted men.
Tehran also took note of the US naval response. Over the weekend, the Nour news agency, which is close to Iran’s Islamic Revolu- tionary Guard Corps (IRGC), reported: “News received from informed sources indicate that the US Navy has sent four warships and a Boeing P-8 Poseidon from the VP-26 squadron to the Caribbean region.”
Nour’s report came shortly after Tehran issued several warnings to Washington, saying there would be a firm response should the latter choose to engage in “piracy.”
Iranian government spokesman Ali Rabiee also struck an assertive note, saying on May 19: “No country is obligated to obey the arbitrary and unilateral American sanctions against other countries. We are committed to doing our nor- mal trade exchanges with Venezuela. The oil tankers carrying gasoline have been freighted after receiving an order from the Venezue- lan government. This is based upon the free will of countries in customary international exchanges.”
Concern over US moves
Concern about the US response to the shipment has been mounting, as Washington said earlier in the month that it was considering “measures” that could be taken in response to the shipments.
Venezuela is already under pressure because of the US sanctions regime. Indeed, the trade restrictions are partly responsible for the under- performance of the South American state’s refining industry, as they have stymied PdVSA’s attempts to source spare parts. Nevertheless, officials in Washington have criticised Caracas for its failure to ensure domestic fuel supplies.
The Iranian tanker shipments are “a sad reminder of Maduro’s hopeless mismanage- ment,” said Morgan Ortagus, a spokeswoman for the US State Department. “Venezuelans need free and fair presidential elections lead- ing to democracy and economic recovery, not Maduro’s expensive deals with another pariah state,” she added.
The fuel deal also drew criticism from John Bolton, a foreign policy hawk who formerly served as White House national security advi- sor. In a Twitter post, Bolton said: “In defiance of US maximum pressure campaigns, Iran is bail- ing out Venezuela by dispatching five large oil tankers to relieve Maduro’s gas shortage. Iran’s attempt to oppose US priorities must be met with resolve. China, Iran and Venezuela cannot succeed.”
Refining industry in pieces
Venezuela is in the midst of an economic cri- sis. The country has the world’s largest crude reserves, but its refining industry, unable to carry out repairs and maintenance because of underinvestment and sanctions, has fallen to pieces, leaving Venezuelans exposed to severed fuel shortages.
Prior to their collapse, the country’s refining sector was capable of processing about 1.3mn barrels per day (bpd) of oil. It is now handling only about 215,000 bpd.
Venezuelan opposition leader Juan Guaido said last week the Iranian fuel shipment should “alarm” Latin America. He was quoted by Reu- ters as saying that the decision to import fuel showed that Maduro’s socialist government was mismanaging the country’s oil industry.
“We are very concerned for the safety of Ven- ezuelans, and of Latin America as well, due to this attempted Iranian presence on Venezue- lan soil,” said Guaido, who leads the opposi- tion-held National Assembly and is recognised as the rightful president by dozens of countries, including the US. He also said his team believed Venezuelan officials were paying Iran for the fuel with “blood gold” from informal mines in Venezuela’s southern jungles, which have caused massacres amid gang battles for territory.™
“ Washington have
criticised Caracas for its failure to ensure domestic fuel supplies
Officials in
Fuel shortages are widespread in Venezuela (Photo: FEE.org)
Week 21 28•May•2020 w w w . N E W S B A S E . c o m
P5