Iran International
Iran, Russia and Venezuela have a large potential to thwart sanctions on their energy sectors if they cooperate, Iran’s government news agency said Wednesday.
The Islamic Republic News Agency (IRNA) in an unsigned article highlighted United States sanctions against the energy industries of the three countries, although each is a different case.
In Iran’s case, sanctions were imposed for its nuclear program after former US president Donald Trump withdrew from the 2015 nuclear agreement known as the JCPOA.
In Venezuela’s case the Obama Administration and many Western countries imposed targeted sanctions against individuals for human rights abuses, corruption, and antidemocratic actions. The Trump Administration expanded economic sanctions, including on the oil industry, in response to the increasing authoritarianism of President Nicolás Maduro.
Russian oil imports have been banned by many countries after its February 24 invasion of Ukraine and many European countries are ending their natural gas imports from Russia for the same reason. However, there are no third-party sanctions on Russian energy exports, which might be the next phase of sanctions.
IRNA argued that Venezuela has the largest oil reserves in the world, mentioning 303 billion barrels, with Iran having 157 billion and Russia with 89 billion barrels of crude, totaling 45 percent of world reserves.
This represents a huge potential for influencing the world market, IRNA said, calling for cooperation between the three countries.
But facts on the ground are somewhat different than what the Iranian government seems to suggest.
Venezuela’s reserves at this moment do not count for much because it was never a large exporter. Before the US sanctions, Caracas exported around 750,000 barrels per day, a small quantity compared with Russia’s and Saudi Arabia’s daily shipments, easily reaching 15 million barrels.
Saudi Arabia alone can easily add two million barrels a day to world oil supply if it decides the move to be in its political or economic interests.
Iran’s spare production capacity is higher than Venezuela’s, but not detrimental to world supplies. In recent months, Tehran has been shipping just under one million barrels a day and if sanctions are lifted it can add a maximum of another 1.5 million barrels.
Putting Iran’s and Venezuela’s spare capacities together, they are roughly equal to what Saudi Arabia can add to world supplies in a short period of time, if it decides to do so.
Venezuela’s oil production infrastructure is in serious disrepair and Iran also admits it needs at least $160 billion in investments to revitalize production that has suffered through successive international and US sanctions.
Meanwhile, as Iran dreams about a ‘cartel’ with Russia and Venezuela, Moscow is going its separate way since the invasion of Ukraine.
Multiple reports in May and June show that Russia is selling its spare crude to China and India at the expense of Iran. A report in May said that around 40 million barrels of Iranian crude is sitting in tankers in Asian waters unable to find customers. Another report on June 13 said Tehran’s oil exports dropped by 50 percent in May, which confirmed earlier news about Russia taking market share from Iran.
Since 2020, Iran has tried to help Venezuela revive its oil and refining industries, by sending technical help and shipping gasoline and oil. Many agreements were also signed during the recent visit of President Nicolas Maduro to Iran, but any serious project needs financing, which is a challenge for both countries.
Answering a question by our correspondent Samira Gharaei at the State department briefing on Tuesday about claims by Iranian Foreign Minister Hossein Amir-Abdollahian that the Islamic Republic has proposed new initiatives aimed at reviving the nuclear deal, spokesman Ned Price implicitly confirmed the news but avoided directly commenting on Iran's proposals.
Price reiterated that Washington and its European partners are ready to conclude an agreement in Vienna for the mutual compliance with the JCPOA, noting that for that to happen, “Tehran needs to decide to drop demands that go beyond the scope of the JCPOA”, suggesting that the new proposals by Tehran include demands extraneous to the 2015 accord.
He confirmed that Tehran and Washington are engaged in indirect regular contact via Enrique Mora, the European Union coordinator for the Iran nuclear talks, saying, “We await a constructive response from the Iranians, a response that leaves behind issues that are extraneous to the JCPOA.”
Earlier in the day, Iran's Atomic Energy Organization released a copy of its answers to IAEA questions about origins of uranium found at three undeclared locations, saying “sabotage” is the only explanation.
The document that was released to the media on Tuesday was earlier submitted to the International Atomic Energy Agency, which rejected the explanations as "technically not credible".
Iran agreed March 5 to provide written explanations by March 20 of long-standing issues in its nuclear work before 2003, and to clear up remaining queries by June 21. The latest quarterly report by the UN watchdog expressed dissatisfaction with Iran’s response to agency over sites not declared as part of the nuclear program where inspectors detected traces of uranium. This led to a resolution critical of Iran’s nuclear cooperation by the agency’s board of governors on June 8.
In its answers, Iran maintained that the only plausible explanation for such traces is probably sabotage by foreign elements at Marivan, Varamin and Turquzabad sites, pointing out that the Varamin center, near the capital Tehran, was "never" used for nuclear activities.
Iran said the IAEA’s claims about storage of nuclear material and/or conduct of nuclear-related activities, at Varamin are not supported by valid proofs and are misleading, noting that “the initial activities conducted in this location had been exploitation of sodium sulphate from the soil and water of the surrounding region.”
For Marivan, which is a misnomer as the site is located near the city of Abadeh in the southwestern Fars province, Iran said the origin of the particles is "unknown" and insists the site was used for "the exploitation of fireclay through a contract with a foreign company decades ago" hence the IAEA’s “conclusion is absolutely false, unrealistic and biased.”
Iran claims it carried out its own investigation in Turquzabad and "did not find the origin of the particles" reported by the IAEA.
Later on Tuesday, the head of the Atomic Energy Agency of Iran, Mohammad Eslami, said that Iran’s contacts with the International Atomic Energy Agency are still underway, reiterating that Iran will act based on the safeguards protocol.
The resolution called on Iran to engage with the IAEA, the United Nations nuclear watchdog, without delay and expressed “profound concern” at Iran’s failure to satisfy the agency over the traces of uranium.
Following the resolution, Iran retaliated, telling the IAEA it plans to remove more monitoring equipment, but intends to maintain a basic level of monitoring and inspectors’ access as required under the Nuclear Non-Proliferation Treaty (NPT).
The resolution comes with year-long talks paused since March between Iran and five world powers aimed at reviving the 2015 Iran nuclear deal, the JCPOA (Joint Comprehensive Plan of Action).