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Iran's gasoline flotilla exposes U.S. gov failed Venezuela policy

As soon as we became aware of Iran's flotilla of gasoline cargoes headed for Venezuela, we said:

There is so much unsubstantiated BS about Venezuela going right now that the simple and evident reality gets buried in a cacophony of "experts" opining on the matter. Not many of those so called "experts", mind you, have followed Venezuelan geopolitics for more than a couple of days, but one of the downsides of internet and social media is that anybody who has an opinion, no matter how ignorant, puts it out there.

We knew those cargoes were going to arrive unimpeded to Venezuelan ports. Sanctions regime imposed by U.S. Treasury on Maduro's regime, in present format, don't go anywhere near to where it should to effectively cut all maneuvering. For instance, Rosneft was sanctioned, but Reliance was not. TNK was sanctioned, but Repsol and ENI were not. Cubametales was sanctioned, and it continues collecting gasoline and crude cargoes from Venezuela on a regular basis. These companies are making an absolute mockery of Donald Trump's administration and its policy vis-a-vis Venezuela, and let's not even mention activities of Alex Saab, Alex Bazzoni, Alex Betancourt, and Axel Capriles.

The Trump administration continues supporting the wrong horse in this race, coming up with half cooked, poorly formulated policies, wrongly implemented by officials who don't get half the problem. But Obama, and Bush before that, made similar mistakes.

Iran wrote the book on circumventing sanctions, and has enough going in that region of the world to show the finger to Uncle Sam. Iran's relationship with chavismo started quite early in the first Hugo Chavez government. Unlike current hysteria, agreements about oil, petrochemicals and energy cooperation between Venezuela and Iran started as early as 2001. Of course, there were no Twitter and instapundits then, ergo no rage about such bilateral deals.

As Alirio Parra once told me, Iran's oil company (NIOC) and PDVSA share similar stories, in that productivity levels fell dramatically once the ever growing number of "revolutionaries" took over the reins. We have stated, and will reiterate, our belief that Iran is no position to fix Venezuela's oil industry. Iran isn't going to repair PDVSA's decrepit refineries, nor it's going to raise its output. Parading Iran's NIOC as some sort of paragon of efficiency in the oil industry has no basis in reality, therefore whatever joint ventures, cooperation agreements, accords, etc. between NIOC and PDVSA will only produce same outcomes that have become norm at these companies. Venezuela had the world's largest refinery complex and produced more than enough gasoline, some of which was exported. It did not need Iran's "expertise" for these achievements. But then chavismo happened.

Chavismo has been in power since 1999. It has failed to keep PDVSA's pre-chavismo production levels ever since, in relation to any measurable basis. Same can be said about NIOC since 1979. Who in a right mind, and on what grounds, can believe that a partnership between these utterly mismanaged companies now is going to, suddenly, raise output to pre-revolution levels?

But when it comes to disruption and to destabilisation, both Iran and Venezuela are world class. Top of the league. Again, protesting this partnership on gasoline flotilla is pointless. The U.S. government has been aware of chavismo's sweet spot for Ayatollahs for nearly two decades. This was not a secret. Bilateral agreeements were signed. Tareck el Aisami was appointed as head of Venezuela's identification office. Result? Hezbollah's Abbas Hussein Harb and Ali Mohamad Saleh had Venezuelan IDs and passports. Mind you, chavismo has kept friendly relations and partnerships with Colombia's FARC narcoterrorists, with Spain's ETA, it counts Vladimir Putin as one its staunchest allies, why would it be different with Iran, or with Hezbollah?

The gasoline flotilla has to be appraised for what it is: a propaganda exercise, a rather cheap and easy way for Venezuela and Iran to show how toothless the U.S. has become, even in its own backyard. In that, they've succeeded.

Microphone diplomacy from Mike Pompeo, John Bolton, and Admiral Craig Faller belong in same category of vapid claims as threats of retaliation by the likes of Bijan Zanganeh. There will be no war for gasoline cargoes. The U.S. Navy will be not launch military attacks. Iran will continue flaunting sanctions, just like Venezuela. Rogue elements will continue seizing quick-enrichment opportunities. Hezbollah operatives in Venezuela, or thinking about capitalising on partnership with chavismo for whatever plan they have, will keep calm and carry on as normal. Venezuela's gold exports, and those involved in shipping it to whatever expedient destination, will continue. For there's another angle that needs to be considered: Putin.

Putin's support for Bashar al-Assad (another friend of chavismo) is public and notorious. Iran's involvement in Syria's conflict is equally notorious. Presence of Russian mercenaries (Wagner), and Russian army / planes is as unobjectionable in Venezuela as it is in Syria, and has gone without much ado in Washington. If there's anything to be gained geopolitically for Putin, and there is in fomenting disruption of established order to further undermine the U.S.' preeminent status of superpower-in-LatAm-neighbourhood, it is almost a certainty that Russia's resources, official and otherwise, will be added to the cause.

Iran's presence in Venezuela should have been countered years ago, when none of these other factors / actors were particularly relevant. Now, paliative measures have got to be surgical, strategic. Money flows ought to be disrupted. Treasury's recent advisory to the maritime industry ought to include Venezuela, which needs to be placed in State Sponsor of Terrorism status without further delay. Parties caught flaunting sanctions, wherever in the world they may operate, ought to be included immediately in Treasury's SDN list. FinCEN ought to send out similar advisories to all financial institutions transacting with Venezuela. Given that military action is not and was never an option, all financial and political tools available to USG have got to be used. The message needs to be unequivocal: deal with Venezuela at own peril. Failure in implementing these sort of counter measures is what has emboldened chavismo. Current mess, it's got to be said, is in large part America's own doing.


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