May 25, 2011 / 5:56 PM / in 7 years

Factbox: U.S.-sanctioned Venezuela's ties with Iran

(Reuters) - The United States has sanctioned Venezuelan state oil company PDVSA for trading with Iran, prompting an outcry from the government of President Hugo Chavez.

Both fierce anti-U.S. ideologues, Iranian President Mahmoud Ahmadinejad and Chavez have become close political and commercial allies in recent years, to the irritation of Washington.

Following are some facts about Venezuela-Iran ties.

* GEOPOLITICS: Ahmadinejad and Chavez aim to weaken U.S. “imperialism” and favor a world divided into multiple centers of power. The Venezuelan leader once called his Iranian counterpart a “gladiator of anti-imperialist battles.”

U.S. officials have expressed concerns about Iran’s ties with left-leaning Latin American governments including Brazil, Bolivia and Nicaragua.

Tehran has increased relations with the commodities-rich but economically poor region, promising to build houses, dairies and vehicle factories. It receives diplomatic support for its nuclear program in exchange.

Some in the United States, including right-wing politicians and media, fear the cooperation goes deeper and that Venezuela might help Iran build nuclear weapons, a charge both countries deny.

* NUCLEAR: Like some other Latin American leaders including Bolivia’s President Evo Morales, Venezuela supports Iran’s nuclear program, which Tehran says is for peaceful purposes.

Chavez himself dropped plans to build a nuclear reactor following the March earthquake and tsunami that crippled a Japanese nuclear power plant. He says he is opposed to atomic weapons.

Iran is helping Venezuela map its uranium deposits, although Venezuela does not yet mine the mineral.

* DEFENSE: Iran’s defense minister visited Venezuela in 2010, the first such visit since the 1979 Islamic Revolution. The two countries’ armed forces said a deal between them included cooperation on training, but did not give details.

Venezuela vigorously denied this month reports in European media that Iran was building a missile base in the South American country, though analysts believe there is some sort of military exchange going on between the countries.

* OIL: Venezuela and Iran are allies within OPEC. Last year they agreed to invest $760 million in each other’s energy sectors and Venezuela pledged to export 20,000 barrels of gasoline per day to Iran to a total value of $800 million.

The U.S. State Department said PDVSA delivered at least two cargoes of reformate, a gasoline blending component, to Iran between December 2010 and March this year worth about $50 million.

The gasoline deal would help Iran if Western powers enforce sanctions on fuel imports due to its nuclear program.

* FINANCE: Venezuela and Iran are critics of global financial institutions like the International Monetary Fund and the World Bank. Last year they set up a joint development bank with starting capital of $200 million.

In 2008 the U.S. Treasury Department imposed sanctions on the subsidiary of an Iranian bank operating in Venezuela. Washington said the bank helped Iran channel money to weapons programs. Iran and Venezuela deny the charge.

A U.S. district attorney said in September he was investigating several banks in Venezuela for aiding Iran dodge sanctions.

* ISRAEL: Chavez is popular in the Muslim world, partly because of his strident opposition to Israeli foreign policy. He calls Israel a “genocidal state” for its military actions against Palestinians and for the 2006 Lebanon war, but does not back Ahmadinejad’s claim that the Holocaust is a “deception.”

* TRADE: Venezuelan imports from Iran were worth $89 million in 2009, with exports of just $450,000. The two countries have signed dozens of deals that on paper are worth hundreds of millions of dollars. Iran has built housing developments, dairies and vehicle factories in Venezuela.

Chavez announced in 2006 the establishment of a regular air service between Caracas and Tehran, but the flights were suspended last year.

Writing by Eduardo Garcia; Editing by Xavier Briand

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