Iran pulls gold bars out of Venezuela’s afflicted vaults

Lacking cash and desperate for help to restore her oil industry, the Nicolás Maduro government is turning to its gold vaults and handing tons of bullion to its former ally Iran, according to people with direct knowledge of the matter.

Out of cash and desperate for help to get her oil industry back, Venezuela is turning to its gold vaults and handing tons of bullion to its former ally Iran, according to people with direct knowledge of the matter.

Government officials loaded about 9 tons of gold, an amount equivalent to about $ 500 million, on planes bound for Tehran this month for the sake of payment for Iran’s assistance in reviving damaged Venezuelan refineries, the people said. The shipments, which resulted in a sudden drop in Venezuela’s published international reserves, leave the country devastated by the crisis with just $ 6.3 billion in foreign exchange, the lowest amount in three decades.

The two nations, both pariahs in international circles, are working more closely together as they try to cope with severe U.S. sanctions and a collapse caused by the coronavirus in the price of oil, their main source of revenue. For Iran, the deals offer a new source of income. For Venezuela, they guarantee that their gasoline supply is not completely depleted.

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Iran is the newest destination for Venezuelan gold after the U.S. it repressed measures similar to the agreements that the Nicolás Maduro regime was executing with Russia, Turkey and the United Arab Emirates.

Mahan Air, the Tehran-based sanctioned airline, has made more than half a dozen flights to the South American nation in the past week alone. Most of the gasoline additives, parts and technicians have come to assist in the repair of the Amuay refinery in Falcón state on the northwest coast. Meanwhile, Mahan has sent other planes to the international airport outside Caracas, where they are loaded with gold bars to take them back to Tehran, the people said, who asked not to be identified because they are not authorized to speak publicly about these transactions.

A press official from the Venezuelan central bank did not respond to requests for comment, nor did officials from the Venezuelan Information Ministry or Iran’s Foreign Ministry.

As oil prices collapse, gold in Caracas is an even more important source of wealth for Venezuela, a country that has fallen into extreme poverty under Maduro’s socialist government. Although the country has about 70 tons of gold in its vaults, selling it has become increasingly difficult.

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When Maduro’s predecessor, the late Hugo Chávez, was in power, he and then-Iranian leader Mahmoud Ahmadinejad reached agreements on a variety of energy, agricultural and financial projects. They even opened a joint automobile assembly plant in western Caracas.

After a brief respite, Venezuela’s currency is again in free fall and inflation has started to rebound, with an annual rate rising to approximately 3,500%, according to a Bloomberg index. The strict quarantine to combat the COVID-19 pandemic is beginning to reveal certain breaks and the risk of further social unrest is growing as Venezuela frantically tries to obtain food and fuel.

With much of the central bank staff isolated in their homes, the transport of the gold bars in armored vehicles to the airport was discreet and carried out by heavily armed employees and security officials from the vaults located in the center of Caracas, according to the people familiar with the matter.

Gold and the remaining assets of the central bank are the subject of a wide battle for control of Venezuela’s finances between Maduro and Juan Guaidó, leader of the National Assembly who is trying to install a transitional government with the support of the United States and nations of Latin America and Europe.