Iran’s state-affiliated Tasnim News Agency reported a significant surge in the nation’s crude oil production output, reaching 3.115 million barrels per day in October. This increase can be attributed to the temporary lifting of oil and gas sanctions on Venezuela’s socialist regime by the Biden Administration. The partnership between Iran and Venezuela not only serves as an ideological alliance against the United States but also facilitates lucrative joint business projects in the oil industry.
However, concerns arise regarding the use of these profits to fund terrorism, as Iran is known to be the world’s primary financial backer of terrorism and has allegedly supported extremist groups like Hamas with large sums of money.
According to data from the Organization of Petroleum Exporting Countries (OPEC), Iran’s October output represents a 46,000 barrels per day increase compared to September’s output. In the third quarter of 2023, Iran’s average crude oil output was 2.996 million barrels per day, a 298,000 barrels per day increase compared to the same period in 2022. Over the past three years, there has been a continuous surge in Iran’s oil production, with the average output in 2021 measured at 2.392 million barrels per day.
Iran’s upsurge in oil production and the subsequent profits are expected to be further boosted by the sanctions relief granted to Venezuela. This relief allows Venezuela to sell its oil, including the oil processed in the country, to American and other international markets. President Joe Biden granted this relief in exchange for a promise of “free and fair” elections in the future, but doubts have been raised about the Maduro regime’s commitment to honoring this promise.
Throughout the past decade, Iran’s presence and influence in Venezuela have grown as part of a long-term plan to expand its reach throughout Latin America. Venezuela is one of Iran’s top business partners within OPEC. Iran has provided extensive technical and logistical assistance to repair Venezuela’s deteriorating oil refineries, which have suffered from years of socialist mismanagement. This assistance aims to reduce Venezuela’s dependency on U.S.-made technology and improve the overall condition of its oil industry infrastructure.
Furthermore, Iran has expanded its oil refining capacities overseas, including the refining of its own crude oil in Venezuela’s refurbished refineries. The recently granted sanctions relief aligns with Iran’s ongoing plans, alongside Venezuela and Syria, to construct an oil refinery in the Syrian town of Homs. This proposed refinery, with a capacity to process 140,000 barrels per day, would significantly boost production and yield further profits for the three allied authoritarian regimes.
Iran’s increased oil output has also resulted in record-high oil exports to China, its top customer. China, being the world’s largest crude oil importer, has seen a 60% increase in its Iranian oil imports between January and October, with an average of 1.05 million barrels per day. In October alone, China imported an estimated 1.45 million barrels per day, marking the highest monthly level ever recorded.
Despite the commendable boost to Iran’s oil industry, concerns remain regarding the potential misuse of profits and the consequences of Iran’s increased influence in the oil market. The partnership with Venezuela, along with China’s growing imports, has bolstered Iran’s oil production and exports, solidifying its position as a prominent player within OPEC.