"Oil Export Agreement Signed Between Iran and Venezuela Despite US Sanctions"

[Asia Economy Reporter Yujin Cho] Iran and Venezuela, both under U.S. sanctions, have signed a contract regarding oil exports.

On the 25th (local time), major foreign media outlets cited five sources related to the contract, reporting that Venezuela agreed to exchange its domestically produced heavy crude oil for Iran's condensate, with the first shipment scheduled for this week.

The exchange agreement was signed between Venezuela's state-owned company Petr?leos de Venezuela (PDVSA) and Iran's National Iranian Oil Company (NIOC), with the contract period set for six months and a possibility of extension.

The oil ministries of Venezuela and Iran, as well as PDVSA and NIOC, did not respond to requests for comments on the agreement.

The U.S. Department of the Treasury has determined that this agreement may constitute a violation of U.S. sanctions against the two countries.

The Treasury stated regarding the agreement, "Transactions with NIOC by persons other than U.S. persons are generally subject to secondary sanctions."

Secondary sanctions involve broad penalties against targets, including blocking access to the U.S. financial system, imposing fines, or freezing assets within the United States.

Due to sanctions tightened by the former Donald Trump administration, Venezuela's oil exports, a core of its economy, decreased by 38% last year, reaching the lowest level in 77 years.

Earlier, at the United Nations General Assembly held in New York, the foreign ministers of Venezuela and Iran publicly declared their intention to strengthen trade between the two countries despite U.S. opposition.