Iran's oil minister visits Venezuela, strengthening sanctioned OPEC members' alliance

Venezuela President Nicolas Maduro and Iranian petroleum minister Javad Owji met May 2 in Caracas, local media reported, deepening ties between the two OPEC members who have helped each other boost their vital crude oil production in defiance of US sanctions.

Venezuela, which has had difficulty securing diluent required to produce its Orinoco oil due to the sanctions, has imported several cargoes of Iranian condensate since October to blend with its extra heavy crude, helping output rebound from historic lows.

Little detail was given of the official business conducted, with Venezuela releasing no official details and Iran's oil and foreign ministries declining to confirm the trip.

Owji and more than a dozen delegates arrived in Caracas on April 30 without prior announcement. According to local media, the delegation visited the Paraguana refining complex in western Venezuela with the president of state-owned PDVSA, Asdrubal Chavez, before Owji's meeting with Maduro at the Miraflores Palace.

"A productive meeting to deepen the ties of brotherhood and cooperation in energy matters," Maduro said in a message posted on his social networks.

Owji also met separately with Venezuelan counterpart Tarek el-Aissami, according to a televised report by Venezolana de Television, the state-owned broadcaster.

"Caracas and Tehran reviewed the alliances they maintain in the OPEC Declaration of Cooperation, the opportunities for bilateral cooperation in the oil, gas and petrochemical sector, as well as in the multilateral," the Venezuelan petroleum ministry said on social networks.

S&P Global Commodity Insights previously reported that seven 2 million barrel cargoes of Iranian condensate have arrived at the Jose terminal, one of Venezuela's main oil ports, located in the northeast.

The shipments arrived in September, October, November, January, February, March and April, and have helped Iran clear some of the volumes it had accumulated in floating storage as it has struggled to find buyers.

Venezuela has used the condensate to produce its extra heavy Merey 16 crude, some of which it has shipped to Iran to sell, under their deal.

In February, the two countries signed an agreement for Iran to export technology and provide services to help Venezuela expand its refineries, which have been plagued by outages and failing infrastructure from years of underinvestment and mismanagement.

In June 2020, Iran supplied state-owned PDVSA with at least five shipments of finished gasoline to meet local demand, with Venezuela at the time highly dependent on imported fuel.

Iran also supplied in 2020 catalysts and spare parts for the operation of some gasoline production units at the Amuay and Cardon refineries.

The meeting comes as both countries have engaged in recent talks with the US to potentially lift the sanctions that have targeted their oil industries.

Negotiations to revive the Iranian nuclear deal have stalled, while discussions between the US and Venezuela in March, amid soaring crude oil prices, will not lead to any imminent sanctions relief, officials said.