Iranian Minister of Oil, Javad Owji, highlighted during a cabinet session (June 21) the fruitful contracts signed in the petroleum sector, specifically focusing on the upstream and downstream activities that were reached during the President's recent visit to Latin American countries, including Venezuela, Nicaragua, and Cuba.
Owji described Venezuela's unique situation due to its possession of the world's largest recoverable oil reserves, accounting for approximately 17.5% of global reserves. However, "cruel sanctions" and the departure of specialized forces have significantly impacted Venezuela's production and refining operations. Nevertheless, he added, a portion of Venezuela's production and refining capacities has been restored through the collaboration of Iranian and Venezuelan petroleum experts and the presence of capable builders and contractors. The issuance of technical and engineering services by Iranian oil and gas industry experts is expected to contribute to the restoration and reactivation of Venezuela's petrochemical capacities.
In addition to Venezuela, the minister also mentioned the cooperation with Cuba. Positive actions have been taken to exchange oil for essential medical supplies, such as vaccines, equipment, and medicines. Another significant collaboration area between Iran and Cuba focuses on revitalizing Cuba's refining capacity.
The barter trade between Iran and Venezuela has existed since 2020, providing mutual benefits for both countries. For Iran, it serves as a means to circumvent US sanctions and alleviate their impact, severely restricting its oil exports. For Venezuela, it helps alleviate shortages of food and medicine caused by the country's economic crisis. The barter trade allows Iran and Venezuela to reduce dependence on the US dollar, the currency of choice for international trade and settling oil contracts. This reduction in reliance on the US dollar helps ease their vulnerability to US sanctions.
Iran, also working with Russia and China, is actively working to reduce their reliance on the US dollar. They have been increasing the use of their currencies in trade with each other and developing alternative payment systems that do not rely on the US dollar. This includes exploring blockchain technology, gold reserves, and other new technologies. These efforts aim to increase economic independence and mitigate the potential impact of US sanctions.