Iran’s Message To US With Venezuela Oil Shipments

(Financial Times, 4.Jun.2020) — For the Islamic republic, it was a mission fraught with risk: send five Iranian-flagged fuel tankers through some of the world’s most crucial maritime gateways to cash-strapped Venezuela without being stopped by the Americans.

With the shipment, Iran intended to send a clear message: that it was determined to challenge US policies more aggressively than before. The mission was accomplished last weekend, when the last of the tankers reached its destination.

Washington did not intervene, despite its large military presence in Caribbean waters, and Iran succeeded in delivering much-needed petrol to the revolutionary socialist government of Nicolás Maduro.

Venezuelan motorists lined up to fill their tanks and the authoritarian leader said he would visit Iran soon to sign more agreements and personally “thank the people” of Iran.

US sanctions on Iran’s oil sales have severely throttled the republic’s ability to export crude. Anyone buying Iranian goods sanctioned by the Trump administration faces the risk of punitive measures from Washington. Venezuela is also under US sanctions.

“Our policy towards the US has changed from a defensive to an offensive approach,” said one Iranian regime insider. “The US sent us messages through two regional states that ‘we will hit your tankers if you proceed’. Our answer was clear: If you hit us, we’ll hit back. And they knew we would do so without a second of hesitation.” In a departure from Tehran’s usual practice when it seeks to defy sanctions, the tankers kept their radars on and did not reroute: they passed through the Suez Canal, the Mediterranean and Caribbean waters.

In the last stage of their journey, Venezuela, which had warned that any US efforts to stop the convoy would be an act of war, sent jets and the navy to escort the tankers.

For Iranian leaders, given the risks and transportation costs from the Gulf to the Caribbean waters, the transaction made little economic sense. In total, they earned at most $50m, probably paid in gold rather than cash to bypass sanctions. The five tankers — called the Fortune, Forest, Petunia, Faxon and Clavel — carried a total of 1.5m barrels.

But, for the regime, the show of strength justified the risks.

A senior businessman of oil byproducts with links to the Islamic regime said: “Our message to [US president Donald] Trump is: you have been playing the crazy, but we are now playing [even] crazier. This approach has disarmed Trump as we show we are not scared of death. Our tankers’ crew knowingly headed to an uncertain situation. It was very brave.”

An emboldened Iran has stood firm in its encounters with the US and Britain over the past year. When British marines seized an Iranian tanker in Gibraltar, alleging that it was carrying oil to Syria in violation of an EU embargo, Iranians retaliated by impounding a British-flagged ship in the Strait of Hormuz. The Iranian tanker was later freed.

Iran also shot down a US drone last year, which put the two hostile states minutes away from a military confrontation. The US killed Iran’s most revered military commander, Qassem Soleimani, in Iraq in January this year. Iran responded with missiles against a US base in Iraq. The US said the attack resulted in no fatalities and did limited damage.

Iran’s ideologically motivated leaders consider the US a “global arrogance”. Relations have worsened since the US abandoned the 2015 nuclear accord between Tehran and world powers, citing Iran’s regional and military ambitions, and reimposed sanctions.

Mahmoud Nabavian, a member of the newly-established hardline parliament, said on Tuesday that the US sanctions could only be defeated by “resistance and missiles”. “We have disrupted the world’s calculations by which we hit the American military base, defy sanctions and send our Iranian-flagged tankers.”

Despite a huge rise in inflation and unemployment, a senior western diplomat in Tehran said the republic was showing no desire to change course in the Middle East. “The US knows its sanctions will not pay off,” said the diplomat.
Acute petrol shortages in Venezuela had presented an unexpected opportunity for Iran, said analysts. Venezuelan refineries are dilapidated because of chronic mismanagement and the difficulty in importing chemicals because of US sanctions designed to push Mr Maduro from power.

Meanwhile, demand for fuel in Iran has fallen because of the coronavirus pandemic. The government of Hassan Rouhani, which had gambled on the nuclear accord and better relations with the west, decided to consider co-operation with the South American state.

Ali Rabiei, an Iran government spokesman, said on Monday that “we are firmly going to continue to do trade wherever we can”.

US secretary of state Mike Pompeo said on Monday the US would hold sanctions violators to account and that the deliveries provided “just enough gasoline for a couple of weeks in Venezuela”. The US has previously stopped non-Iranian vessels travelling to Venezuela.

Iran’s show of power had also sent a message to Moscow, analysts said. Russia’s state-owned oil company, Rosneft, had acted as an intermediary for sales of Venezuelan crude until new US sanctions targeted its subsidiaries. Tehran had seen this as a chance to show the Kremlin its willingness to stand up to the US, analysts said.

“Whether we send more convoys to Venezuela is not significant. Iran has unveiled the US’s great emptiness and that it cannot deal with Iran,” said the insider.

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— By Najmeh Bozorgmehr. Additional reporting by Katrina Manson in Washington

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