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U.S. Looks For Ways To Cut Off Iranian Gasoline Shipments To Venezuela

Federal prosecutors in the United States are looking to seize Iranian gasoline on tankers currently en route to Venezuela by filing a civil-forfeiture complaint, The Wall Street Journal reported on Thursday, as the U.S. steps up sanctions and pressure against both Iran and Venezuela.

Four tankers loaded with gasoline are currently traveling to Venezuela, after the first of five tankers carrying Iranian fuel for gasoline-starved Venezuela reached the country sitting on top of the world’s largest oil reserves in May.

Lack of diluents, lack of maintenance, lack of money, and lack of spare parts have forced Venezuela’s refineries to operate at very low processing rates, if at all, and the holder of the world’s biggest oil reserves doesn’t have enough gasoline for its people.   

Iran is helping Venezuela and warned the United States in May not to interfere with any Iranian fuel shipments to Venezuela in Caribbean waters.

Now U.S. federal prosecutors are looking to seize the gasoline en route to Venezuela, prevent future shipments, and not allow Iran to take the payment for the delivery. U.S. Attorney for the District of Columbia, Zia Faruqui, said in the civil-forfeiture complaint that the U.S. alleges that Mahmoud Madanipour, a businessman connected with the designated terrorist organization Islamic Revolutionary Guard Corps (IRGC), has arranged the gasoline shipments, the Journal reported.

Iran and Venezuela cooperate in other ways to get Iranian help for Venezuela’s oil industry, according to U.S. officials.

U.S. Special Representative for Venezuela Elliott Abrams said earlier this year that Nicolas Maduro’s regime is paying Iran in gold for help with Venezuela’s crumbling oil industry. 

“Those planes that are coming in from Iran that are bringing things for the oil industry are returning with the payments for those things: gold,” Abrams said. 

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In April alone, Venezuela loaded 9 tons of gold, worth around US$500 million, on airplanes for Iran, in exchange for Iranian help for repairing Venezuela’s crumbling refineries, sources with direct knowledge of the matter told Bloomberg.   

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on July 02 2020 said:
    This could lead to a serious escalation of tension between the United States and Iran. Under international law, the United States has no extraterritorial jurisdiction unless it is going to apply the law of the jungle.

    Moreover, the gasoline shipped by Iran to Venezuela is a government-to-government arrangement so a civil-forfeiture complaint doesn’t apply here and it is up to the United States to prove otherwise.

    Meanwhile, if the United States decides to seize the Iranian gasoline en route to Venezuela, Iran could retaliate by interfering in oil shipping through the Strait of Hormuz.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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