Iran has increased its delivery of a key crude oil grade that Venezuela is using to boost the productivity of its refineries, allowing the Latin American nation to free its lightest grades for blending and exporting.
Venezuela’s state-run oil company PDVSA is set to receive 4 million barrels of Iranian heavy crude this month, up from 1.07 million barrels delivered in June.
The volume of the incoming delivery is similar to that received in May, when a supply contract with Iranian state firm Naftiran Intertrade Co (NICO) was signed, documents reviewed by Reuters show.
Two Iranian-flagged supertankers are expected to arrive in Venezuela’s Jose port by the end of July. The vessels’ transponders were last spotted passing near Fujairah in the UAE last month.
The heavy Iranian crude is allowing Venezuela to increase output of motor fuels in their facilities, which have been ravaged by sanctions and sabotage attempts by US-backed groups.
Venezuela’s oil industry has been one of the worst hit by crushing US sanctions, dropping from an output of two million barrels per day in 2012, to just a few hundred thousand at the start of 2021.
Energy agreements between Tehran and Caracas were extended following a visit by Iran’s Oil Minister Javal Owji to Venezuela in early May.
The new shipments of Iranian crude are expected to help PDVSA recover stocks of its flagship exportable grade, Merey, after production fell to about 1 million barrels in early July.
PDVSA has also continued importing about 2 million barrels per month of Iranian condensate, helping boost output of exportable blends. In June, oil exports from Caracas fell to their lowest level since October 2020, as repairs of the country’s main oil port are ongoing.
Earlier this year, Iranian state companies signed a deal to revamp the Paraguaná Refining Center (CRP), Venezuela’s largest oil refining plant. This was followed by restoration work on Venezuela’s El Palito refinery.
The two US-sanctioned nations have significantly bolstered cooperation in recent years, swapping Venezuelan heavy oil and other commodities for Iranian gasoline, condensate, refinery parts, and technical assistance.
Oil industry analysts revealed earlier this year that Venezuela doubled its oil production between 2021 and 2022 thanks to the help of Iran.