U.S. targets Iran-Venezuela trade, tanker market suffers a blow
THE Trump administration is considering new sanctions on reportedly 50 oil tankers for working with Venezuela, in order to prevent the trade between Iran and the Latin American country.
Earlier this week, a U.S. official told Bloomberg that the sanctions were intended to avoid a U.S. military confrontation with other countries (indicating Iran and Venezuela).
Despite their anti-conflict claims, the Trump administration is, in fact, trying to block Iran’s support for Venezuelan people who are struggling with severe fuel shortages amid their country’s economic stagnation.
Furthermore, the US actions are impacting the whole global market which is already wrestling with the pandemic. Last weekend, Reuters reported that the global tanker market was getting worried over the news of the U.S. sanctions. The reason for the U.S.’s recent decision could be seen as getting back to Iran who had recently landed a heavy hit on the Trump Administration’s ego by sending five fuel loaded vessels to Venezuela before the eyes of the U.S navy.
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The vessels delivered a total of 1.53 million barrels of gasoline and other oil products to the fuel-hungry Venezuelans in May.
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Earlier this month, the U.S. Department of the Treasury sanctioned four shipping companies and their crude tankers for continuing to facilitate oil trading with Venezuela.
The tension between Washington and Tehran has been escalating since 2018 when U.S. President Donald Trump withdrew from Iran’s 2015 nuclear deal and re-imposed sanctions on the Islamic Republic.
The Latin American country used to have the cheapest gasoline in the world and supplied fuel with subsidised prices for two decades, however, following the U.S. sanctions almost all of the country’s refineries shut down due to the lack of equipment and prepare maintenance.
The Venezuelan government has been forced to implement a rationing system and raise gasoline prices in recent months, while the gas stations in the country are currently under military control.
As a result, a black market is formed in which every liter of gasoline is sold for at least two dollars, and people have to wait for hours in long lines to get gas; people are the main victims of U.S.’s disruptive actions. Washington is targeting people by blocking foreign revenues that could be used to import humanitarian goods, including food and medicine, Venezuela’s Foreign Minister, Jorge Ariazza said on Tuesday.
Iran has repeatedly reported that it is Iran and Venezuela’s legal right to be able to trade with each other and no country can impede the economic transactions between the two countries which are both sanctioned by the U.S. Iran also complained to the United Nations and summoned the Swiss ambassador in Tehran, who represents U.S. interests in the Islamic Republic, over possible measures Washington could take against the Iranian tankers.
Later on, in response to the U.S threats for military actions, Iran’s foreign ministry said that any U.S. attempt to halt trade with Venezuela would face an immediate and decisive response.
Regarding the recent sanctions, if the Islamic Republic decides to continue trade with Venezuela it would use vessels belonging to its own shipping line most of which are already sanctioned by the U.S., so the new sanctions, despite their negative impacts on Venezuela’s global trade, would not have a huge effect on the trade between Iran and its Latin American ally.