By Francisco Toro of CaracasChronicles

In January 2011, the oil tanker Aspasis – flying a Barbados flag – shipped 271,000 barrels of gasoline from the Curaçao refinery of PDVSA (Venezuela’s oil company) to Iran in contravention of both U.S. and international sanctions. That is the allegation that U.S. Energy Department officials have officially informed Venezuela that they are now investigating.

PDVSA’s head, Rafael Ramírez, has consistently denied the allegation, but documents purporting to substantiate the charge have begun to emerge. If confirmed, the implications of such sanction-busting could be wide-ranging. Although a major oil producer, Iran lacks the refining capacity to supply its own domestic market. Hence, gasoline import restrictions are a key pressure point in U.S. efforts to pressure Tehran to give up its nuclear weapons program. The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) is designed to automatically trigger serious commercial sanctions against firms that supply Iran with fuel. The Act has so far been successful; some estimates place the decline in gasoline shipments to Iran at 75% after the introduction of sanctions. In response, the Islamic Republic was forced to quadruple domestic gasoline prices to stem rising demand, and may soon be facing outright shortages, making securing gas supplies a key priority for Tehran.

For years, Venezuela has pushed the boundaries of international acceptance of its alliances with rogue and terrorist governments and entities. In Colombia, for example, the Chávez regime’s ties with Marxist guerrillas often stress bilateral relations. Many media reports, most recently by award winning Spanish investigative reporter Antonio Salas, have documented the use of Venezuelan territory by Hezbollah and other Islamic extremists groups for weapons training, as well as Venezuelan banks for financing. Venezuela has gone as far as to imperil its key bilateral relations with Spain – paradoxically, a key source of weapons, investment and technology – by continuing to shield suspected ETA terrorists from Spanish justice. Consider this: Arturo Cubillas, the man Spain believes heads ETA’s Latin American operations, holds an important security job at Venezuela’s Agriculture Ministry.

In the United States, various influential legislators, from both political parties, have publicly condemned Chávez’s ties to terrorism. Florida Congressman Connie Mack recently urged the Obama Administration to impose a wide-ranging embargo against the Chávez regime. Nevada Senator John Ensign has long been an advocate of adding Venezuela to the State Department’s list of states that sponsor terrorism. “It is Hugo Chávez who has allowed Iran and its extremists allies to have a foothold in South America,” has said New York Congressman Eliot Engel. So far, U.S. dependence on oil imports from Venezuela has forestalled any decisive action. In a tight oil market, with prices spiraling up, it’s hard to imagine the United States cutting off its Venezuelan nose to spite its energy face.

Iran’s sanction-busting action, however, is a different matter. Unlike the “State Sponsor of Terrorist” designation – where U.S. legislation leaves room for political judgment, the Iran Sanctions Act calls for far more specific action points in response to violations. The Act – the central policy instrument in what many believe to be America’s premier security challenge in the world today, includes a series of “triggers”: actions that, once certified, leave the White House little choice but to enforce sanctions.

Considering that the sale of gasoline and other refined products to Iran feature prominently in the list of violations, and that documentary evidence in the public sphere strongly suggests Venezuelan complicity in that matter, the U.S. Energy Department may not have much choice but to impose at least some sort of punitive measure on PDVSA. The Obama Administration would, however, retain some discretion over which types of sanctions to apply,  and these could range from crippling moves that would hamper PDVSA’s day-to-day operations to something far less severe.

At a time of heightened instability in the Middle East and a possible full-blown civil war in Libya, and as oil prices continue to rise, there will be close to no room for oil inventories to absorb yet another supply shock. Faced with that reality and the strict parameters of the Iran Sanctions Act, the Obama Administration finds itself between a rock and a very, very hard place.