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Venezuela sends jet fuel to Iran in exchange for gasoline: sources

By Deisy Buitrago and Marianna Parraga

CARACAS / MEXICO CITY, Feb 23 (.) – Venezuela is sending aviation fuel to Iran in exchange for crucial gasoline imports as part of an agreed swap between the two state oil companies, three people with knowledge of the matter told ..

Iran has stepped up assistance to Venezuela since the United States tightened sanctions on both countries last year, hitting exports from state-owned Petróleos de Venezuela and the National Petroleum Company of Iran (NIOC).

The Islamic Republic has sent fleets of tankers operated by state-owned companies to Venezuela that have transported gasoline and raw materials to produce motor fuels, as well as equipment and spare parts to help the OPEC nation resume operations at its battered refineries.

But the countries have provided few details about what, if anything, Iran receives from Venezuela in return.

Both Caracas and Tehran, which the United States has sanctioned in an attempt to halt its nuclear program, have hailed the fuel supply as a method of resisting pressure from their common adversary.

Iran’s embassy in Caracas said in August that Venezuela had sent a shipment of mangoes and pineapples to Iran as part of mutually beneficial trade relations.

However, one of the sources said that NIOC and PDVSA agreed last year to a full swap of Venezuelan aviation fuel to pay for Iranian gasoline.

Unlike a temporary convenience negotiation, the exchange between the oil companies could be interpreted as a sign of a long-term commercial relationship built.

Aviation fuel, a residual product that results from the crude distillation process in a refinery, is now abundant in Venezuela due to the reduction in commercial air traffic as part of measures imposed by the coronavirus pandemic.

Venezuelan aviation fuel has been being shipped in Iranian tankers to ensure a continuous flow of products and to take advantage of available vessels, a source said. These types of transportation are known as “perfect voyages” in the maritime industry, as ships sail fully loaded in both directions.

Many tanker ship owners and operators have been reluctant to transport Venezuelan oil or deliver imported fuel to it since Washington sanctioned a group of vessel owners last year.

The supply delivered in compensation has included at least a shipment of 1.9 million barrels of Venezuelan heavy crude Merey, shipped to NIOC in October, according to PDVSA documents seen by ..

So far, the mechanism has allowed the two state-owned companies to dispatch shipments in and out of Venezuela aboard Iranian-flagged vessels that have docked in the ports of the South American nation at least three times since May 2020, according to sources and data from Refinitiv Eikon.

PDVSA since 2020 has been selling Iranian gasoline at dollar-denominated prices at domestic service stations, which has provided much-needed hard currency for its operations. It is not clear whether Iran is using Venezuelan aviation fuel for consumption or whether the shipments have been resold.

Neither PDVSA nor the Venezuelan Petroleum Ministry responded to requests for comment. NIOC and the Iranian Mission to the United Nations did not immediately respond to requests for comment.

PERFECT TRIPS On its most recent trip to Venezuela, the Iranian-flagged Fortune tanker, operated by the state-owned National Iranian Tanker Company (NITC), loaded 250,000 barrels of aviation fuel in early February at the eastern terminal of Puerto La Cruz after unloading about 300,000 barrels of Iranian gasoline, said a person with knowledge of the shipment. A third person close to the dispatches confirmed that both Fortune and Faxon, which have made several trips from the Iranian port of Bandar Abbas to Puerto La Cruz between May 2020 and February 2021 – often with their communication equipment turned off – , were full again upon departure, although the person did not know what fuel they had loaded.

NITC declined to comment. In addition to aviation fuel, Venezuela sent alumina to Iran aboard a cargo ship that transported supplies for a supermarket in Caracas.

US officials have said that Caracas is also paying Tehran in gold.

In February, Iran also resumed air shipments of catalysts to Venezuela to help PDVSA boost fuel production in its refining network of 1.3 million barrels per day of capacity, which is mostly paralyzed.

A portion of Iranian gasoline shipments was seized last year by the United States Department of Justice, contributing to the acute fuel shortage in Venezuela.

(Reporting by Deisy Buitrago in Caracas and Marianna Parraga in Mexico City. Additional reporting by Mircely Guanipa in Maracay, Venezuela and Parisa Hafezi in Dubai. Edited by Vivian Sequera and Javier Leira)

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