Venezuela Relies on Iran and Sanctioned Airlines for Fuel Production

Venezuela Relies on Iran and Sanctioned Airlines for Fuel Production

By Diálogo
October 04, 2021

On August 14, an aircraft of Qeshnm Fars Air, an Iranian airline under U.S. sanctions, landed at Simón Bolívar International Airport, in Maiquetía, Caracas. The aircraft had left Tehran with a valuable shipment for the Nicolás Maduro regime: 47.9 tons of catalysts for fuel production.

A Bolivarian National Guard document in the possession of Horacio Medina, current president of the ad hoc Administrative Board of Petróleos de Venezuela (PDVSA, in Spanish), indicates that authorities transferred this entire shipment to the Paraguaná Refining Center (CRP, in Spanish), in Falcon state.

According to Medina, catalysts are necessary precursors to accelerate the hydrocarbon manufacturing process. This enables the Cardón refinery, which is part of the CRP, to produce between 25,000 and 40,000 barrels per day of gasoline.

However, the Iranian airline flights are not enough to keep the refineries operational. Another document Medina holds indicates that the Venezuelan regime is also using the Venezuelan airline Conviasa to complement the transfer of supplies.

The British commodity news Argus Media reported that Conviasa flights transporting catalysts began in February. On August 20, according to Medina’s document, an aircraft with the tail number YV3507 arrived from the Iranian capital with another 23-ton shipment of catalysts.

In February 2020, the U.S. Department of the Treasury sanctioned Conviasa and its entire aircraft fleet because the Venezuelan regime used it “to shuttle corrupt regime officials around the world to fuel support for its anti-democratic efforts,” then-Treasury Secretary Steven Mnuchin said in a statement on February 7, 2020.

At this time, according to Medina, the only supplier of these key precursors for the Venezuelan oil industry is Iran, due to an agreement between the Islamic Republic and the Maduro regime.

He explained that if PDVSA attempted to obtain these materials from other suppliers, it would have to pay in cash, since this would be the only way to avoid U.S. sanctions.

Payments in kind

Importing catalysts on sanctioned airline flights departing from Tehran is not free.

“Business with Iran is very shady. Iran is charging a heavy price for catalysts. The business is between mafias, with trades. They take crude oil and resell it off shore. We are talking about catalysts for crude oil,” said Iván Freites, secretary of Professionals and Technicians of the Unitary Federation of Petroleum Workers of Venezuela.

He added that another form of payment for these precursors has been jet fuel. In 2020, PDVSA and the National Iranian Oil Company agreed to exchange jet fuel, which is abundant in Venezuela due to the suspension of most air travel as a result of COVID-19 restrictions, the Reuters news agency reported. According to reports from Argus Media, Iran might also receive payment in Venezuelan gold.

Freites said that the crude oil to pay for the catalysts is loaded at the Cardón docks, in Falcón state. The vessels “operate with [their] locators and lights off,” to hinder U.S. detection and possible sanctions.

In his opinion, some of the catalyst shipments might go to the El Palito Refinery, in Carabobo state, which suspended operations in November 2020. In June, PDVSA’s refinery board representative José Joaquín Vargas said that this facility had recovered by 80 percent. But it hasn’t been reactivated so far.