Iran can ship two to three gasoline cargoes to Venezuela every month, helping to ease domestic oversupply but risking retaliation from the United States, Reuters reported, citing sources close to the Islamic republic’s Oil Ministry. Since April, Tehran has delivered about 1.5 million barrels of fuel in five tankers to Venezuela, although it remains insufficient to alleviate shortages in the South American country.
The Trump administration has warned ports, shipping companies, and insurers against helping the shipments. A spokesman with the State Department said Washington would not tolerate supports to Venezuela. However, he did not detail what actions could be made.
Iran completed construction of the 350,000-bpd Persian Gulf Star refinery in 2019, ending decades of importing gasoline. However, the COVID-19 pandemic slashed domestic gasoline demand to 450,000 bpd in Q1 from 650,000 bpd a year earlier, resulting in a 172,000-bpd glut.
According to some trading sources, Iran is not ready for glut due to limited storage capacity. To eliminate the oversupply, the country needs to import 15 to 20 medium cargoes each month, but it delivered only five shipments a month to Asia and Africa. Hence, Venezuela is the only viable option for Iran, some traders said.
