Mike Sommers, president and CEO of the American Petroleum Institute, discusses the U.S. oil industry’s perspective on possible re-engagement in Venezuela on “Kudlow.”
The arrest of the Venezuelan president last week Nicolas Maduro opened the world to see the mess that the country with the largest proven oil reserves in the world was still starving and abusing its people. But there is more to the story than the alleged crimes of the previous leader.
Notably, one of Venezuela’s closest allies in recent years has been the Islamic Republic of Iran. Broadly speaking, that regime is a staunch enemy of the West, and in particular it hates the US and the freedoms it stands for.
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Iranian revolutionary guards secure the area during the inauguration ceremony of a joint petrochemical plant in the Asaluyeh industrial zone on the Gulf Coast, July 2, 2007. Then-Iranian President Mahmoud Ahmadinejad and his Venezuelan counterpart Hu (Atta Kenare/AFP via Getty Images/Getty Images)
But that’s where Iran stepped in to “help.” In 2022, the Iranian regime signed a twenty-year, multi-faceted agreement to help Venezuela. This mainly concerned Iran’s recovery of the Venezuelan oil industry. “Iran brought oil extraction technology and expertise and shipped refined gasoline to help the country,” Ottolenghi said.
This makes a lot of sense for both sides, as oil production in Venezuela had fallen from 2.6 million barrels per day in January 2016 to 669,000 barrels per day in December 2022. According to Trading Economics, production recently increased to 1.14 million barrels. That increased production seems impressive considering that the US has increased sanctions on Venezuela from 2023 through 2025. At least some of the profits went directly to Iran, which had access to refineries in Venezuela, Ellis says.
Some Venezuelan naval special forces were sent to Iran for underwater combat training, Ellis said. He speculates that such training could be used to attach bombs to the side of oil rigs.
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A person walks past a gas station of state oil company PDVSA in Caracas, Venezuela on March 16, 2022. (Gaby Oraa/Reuters / Reuters Photos)
“Venezuela has also been used as a base for propaganda throughout the region, including TV channels,” Ottolenghi said. ‘Iran has a university in Caracas and they use it to spread their philosophy.
Iran’s close relationship with the Venezuelan regime has allowed access to Venezuelan passports, allowing Iranians to move more freely throughout the region in a way that people with Iranian passports could not. “I would argue that Venezuela has been one of Iran’s gateways to the region,” Ellis said.
The question for those observing the situation now is: what happens next? Ottolenghi says: we have to wait and see what actually happens. “Will the local population be rebellious and resistant to the changes the US is calling for?”
Young women wave the national flags of Venezuela and Iran during the arrival of former Iranian President Ebrahim Raisi at the Miraflores Presidential Palace in Caracas, June 12, 2023. (Yuri Cortez/AFP via Getty Images/Getty Images)
Ellis also sees some groups joining the new regime. “The Chavistas who expropriated property were not good people, but to me, in order to get along with President Trump, they would probably be happy to cooperate,” Ellis says. Chavistas are the historic Venezuelan socialists who originated under the president Hugo Chavez and continued under Maduro. Similarly, the oil and mining sectors want to escape US sanctions, so they are likely to comply, he says.
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That says there will be some changes when it comes to Iran’s presence. “We will see some of Iran’s activities curtailed.” “I see a serious blow to the Iranian presence in Venezuela.”
