Iranian state-owned companies have begun preparations for the reconstruction of the Paraguan Oil Refinery Center, the largest oil refinery in Venezuela with a production capacity of 955,000 barrels per day, after signing a contract to repair the smallest refinery there.

The deal will cement a relationship that has been a lifeline for Venezuela’s collapsing oil sector amid decades of economic mismanagement, underinvestment and heavy U.S. sanctions.
Iran, which is also under the weight of US sanctions, has supplied the government of Venezuelan President Nicolas Maduro with fuel and plasticizers, which are used to reduce the density of oil to make it exportable. Since 2020, it has been supplying spare parts for repairs and upgrades to Venezuela’s 1.3 million barrels per day refinery network.
A division of the National Iranian Oil Refining and Distribution Company signed a 110 million euros ($116 million) contract this month with Venezuela’s state oil company PDVSA to repair and expand the 146,000 bbl/d El Palito refinery. The next venture will be Paraguana, a complex that includes two of the world’s largest oil refineries.
The refinery, known as CRP, was operating at just 17 percent capacity in April, according to independent estimates.
“Within a year, Iran will be able to move its people to Paraguana,” one of the sources said. “They have been very focused on preparations, including providing housing for the workers.”
Earlier this year, Iranian oil companies supplied Paraguana with spare parts to restart a gasoline plant. A source familiar with the deal said the North American-made equipment arrived in Venezuela from China after the Iranians took over the procurement and transportation.
The same source added that many Chinese companies avoid direct deals with Venezuela for fear of sanctions or non-payment of invoices, and only settle for deals where a third party processes orders and payments.