Mike Sommers, American Petroleum Institute President & CEO, discusses the U.S. oil industry’s perspective on potential re-engagement in Venezuela on ‘Kudlow.’
Last week’s capture of Venezuelan president Nicolás Maduro opened the world to see the mess that the country with the largest proven oil deposit in the world was still starving and abusing its people. But there’s more to it than the alleged crimes of the previous leader.
Notably, one of Venezuela’s closest allies over the past few years has been the Islamic Republic of Iran. Broadly speaking, that regime is a staunch enemy of the West, and specifically, it hates the U.S. and the freedoms it stands for.
“Despite being the country with the largest reserves, Venezuela’s oil industry is no longer able to refine its own gasoline to fulfill its own needs,” Emanuele Ottolenghi, a senior research fellow at The Center for Research of Terror Financing, told FOX Business.
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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, 02 July 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 entered into a 20-year multifaceted deal to help Venezuela. Notably, that involved Iran’s fixing Venezuela’s oil industry. “Iran brought oil extraction technology, expertise, and shipped in refined gasoline to help the country,” Ottolenghi says.
This makes a lot of sense for both parties because oil production in Venezuela had fallen from 2.6 million barrels a day in January 2016 to 669,000 barrels a day by December 2022. Production increased to 1.14 million barrels recently, according to Trading Economics. That increased output seems impressive given that the U.S. increased sanctions on Venezuela from 2023 through 2025. At least some of the gain went directly to Iran, which had access to refineries in Venezuela, Ellis says.
There is also a military component to Iran’s presence in the South American country, Evan Ellis, Latin America Research Professor with the U.S. Army War College, told FOX Business. “While in Venezuela, Iranian operatives were involved in the assembly of military drones, “he says. “Plus, Venezuela acquired some Iranian-made fast attack boats armed with missiles to threaten people off the coast.”
Some Venezuelan special naval forces were sent to Iran for underwater combat training, Ellis says. He speculates that such training might 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 March 16, 2022. (Gaby Oraa/Reuters / Reuters Photos)
“Venezuela has also been used as a base for propaganda across the region, including TV channels,” Ottolenghi said. “Iran has a university in Caracas, and they use it to propagate their philosophy.
Iran’s close relationship with the Venezuelan regime has allowed access to Venezuelan passports to allow Iranians to move more freely around the region in a way that those with Iranian passports could not. “I would argue that Venezuela has been one of Iran’s gateways to the region,” Ellis said.
The question now for those observing the situation is, what happens next? Ottolenghi says, we have to wait and see what actually happens. “Will the locals be defiant and resistant to the changes that the U.S. is requesting?”
Young women wave the national flags of Venezuela and Iran during the arrival of former Iranian President Ebrahim Raisi at Miraflores Presidential Palace in Caracas, on June 12, 2023. (Yuri Cortez/AFP via Getty Images / Getty Images)
Ellis also sees some groups falling in line with the new regime. “The Chavistas that expropriated property were not good people, but to me, in order to get along well with President Trump, they are likely to be happy to cooperate,” Ellis says. Chavistas are the historical Venezuelan socialists who originated under President Hugo Chavez and continued under Maduro. In a similar way, the oil and mining sectors want to get out from under U.S. sanctions, so they are likely to comply as well, he says.
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That says there will be some changes when it comes to Iran’s presence. “We are going to see certain activities by Iran get curtailed,” “I see a serious hit to the Iranian presence in Venezuela.”
