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Venezuela Paying Iran 'In Gold' For Alleged Help To Revive Oil Industry

An Airbus A340-300 of Iranian airline Mahan Air taxis at Duesseldorf airport DUS, January 16, 2019

The U.S. Special manager for Venezuela on Thursday said in a desperate attempt to revive its oil industry, cash-strapped Venezuela is paying Iran with gold in return for Iranian assistance.

Since April 21 an air bridge has been opened between Iran and Venezuela with several flights by Mahan Air. The airline has been under U.S. sanctions since 2011 for allegedly transporting fighters and weapons to Iran's proxies and support of terrorism on behalf of the Revolutionary Guard.

On April 24 Associated Press (AP) reported that two flights by Iran's Mahan air had landed at a western Venezuelan town on April 23 and 24 to deliver key chemical components used for producing gasoline. A source told AP that 14 more flights were expected in the coming days, some of them carrying Iranian technicians.

"Our assumption is that those planes that come from Iran are bringing things for the oil industry, and they return full of gold as a form of payment," El Politico quoted Elliot Abrams, the U.S. Special manager for Venezuela as saying.

Informed sources have told Bloomberg that Venezuela has sent some 9 tons of gold – an amount equal to about $500 million – to Iran by Mahan Air this month for help in revival of its crippled gasoline refineries.

But Iranian help to revive Venezuela's oil industry is just an assumption at this point, and the gold transfer could have other reasons.

Secretary of State Mike Pompeo on Wednesday said Mahan Air flights had to stop and called on other countries to deny overflights to the sanctioned airline.

The BBC quoted a Western diplomatic source in February 2019 saying that Venezuela was exporting huge quantities of gold to Turkey, part of which was ending up in Iran. The source said that Turkey had been warned. However, Turkish President Recep Erdogan was a vocal supporter of the Venezuelan regime during the push last year by the United States to bring the opposition to power.

Opponents of Nicholas Maduro accuse the Venezuelan government of mining gold in illegal ways, using mafia networks to control small miners with use of violence.

The United States has urged other countries to deny overflight rights to Mahan Air in addition to the denial of landing rights already in place by some countries. "You've got one terrorist regime helping another terrorist regime," the U.S. Special Representative for Iran Brian Hook said in an exclusive interview with Radio Farda on April 30.

"The [Iranian] regime regularly claims things that are false, including that they were helping Venezuela's oil industry. But I think we can probably safely assume it's not limited to that," he said.

Iran boosted its relations with Venezuela during the presidencies of Hugo Chavez and Mahmoud Ahmadinejad who made various agricultural, industrial, and financial agreements. Iran also undertook construction projects in Venezuela and built several factories including a car assembly factory. Venezuela, however, failed to pay for some of the services offered by Iranian companies and the level of economic relations has dropped since.