US reimposes oil sanctions on Venezuela as hopes for a fair presidential election fades
MIAMI– The Biden administration reimposed crushing oil sanctions on Venezuela on Wednesday, admonishing President Nicolás Maduro’s efforts to consolidate his rule, just six months after the US eased restrictions in an effort to boost now-fading hopes for a democratic opening in OPEC country to support.
A senior US official, discussing the decision with reporters, said any US company investing in Venezuela would have 45 days to wind down its operations to avoid creating uncertainty in global energy markets . The official spoke on condition of anonymity to discuss U.S. policy deliberations.
In October, the US granted Maduro’s government sanctions relief on the state-run oil, gas and mining sectors after agreeing to work with opposition figures to hold free and competitive presidential elections this year.
While Maduro subsequently scheduled elections for July and invited international observers to monitor the vote, his inner circle has used the ruling party’s total control over Venezuelan institutions to undermine the deal. Actions include blocking his main rival, ex-lawmaker Maria Corina Machado, from registering her candidacy or that of a designated alternative. Numerous government critics have also been jailed in the past six months, including several of Machado’s aides.
Wednesday’s actions essentially return U.S. policy to what it was before the deal struck on the Caribbean island of Barbados, making it illegal for U.S. companies to do business with state oil producer Petróleos de Venezuela SA, better known as PDVSA , without any form of permission. specific authorization from the US Treasury Department.
It is unclear what impact the snapback would have on Venezuela’s long-flagging oil and gas industry — and whether it will put pressure on Maduro to provide a more level electoral playing field.
The initial postponement was only for six months. Experts say that is not nearly enough time to attract the large capital investments needed to revive long-stagnant production in Venezuela, which sits atop the world’s largest proven oil reserves.
However, by allowing Venezuela to send oil directly, rather than going through shady intermediaries who charge a hefty fee, Maduro’s government was able to increase oil revenues and bring in much-needed cash during the six months of U.S. relief sanctions.
Moreover, the tightening of sanctions will not directly affect Chevron, the last major US oil driller in Venezuela, which was allowed to boost exports thanks to a permit issued in 2022 amid concerns that Russia’s invasion of Ukraine would disrupt global energy supplies.
“The real test of the administration’s seriousness toward Venezuela is Chevron,” said Elliott Abrams, who served as the Trump administration’s special envoy for the Venezuela crisis. “Leaving that permit in place suggests that the administration is more concerned about keeping oil prices low until the election, and Chevron’s profits, than about U.S. national security interests and freedom in Venezuela.”
While it is a signal of its growing frustration with Maduro, the Biden administration is unlikely to return to the failed “maximum pressure” campaign tried during the Trump administration that only made the left-wing leader stronger, they said experts.
“It became impossible for the White House to pretend that the Maduro administration was in any way complying — or even planning to comply — with the implicit deal in the partial lifting of sanctions,” said Christopher Sabatini, a research associate at the Chatham House in London. “Ignoring that would make the U.S. look weak and undermine the country’s credibility in imposing sanctions not just on Venezuela but elsewhere.”
Opinion polls show that most Venezuelans would eagerly remove Maduro from office if given the chance. Numerous regional leaders, including the left-wing presidents of Colombia and Brazil, have joined the US in criticizing the Maduro government’s failure to meet its commitments and facilitate competitive elections.
—
Garcia Cano reported from Mexico City.