The US eases sanctions on Venezuelan oil and gas after electoral agreement

The administration of US President Joe Biden eased sanctions on the US oil and gas sector. Venezuela after the electoral agreement reached by the country’s government and opposition, marking the broadest review of Trump-era restrictions on the OPEC nation.

A new general license issued by the United States Department of the Treasury authorizes Venezuelawhich had been under harsh sanctions since 2019, to produce and export oil to chosen markets for six months without limitation.

The Secretary of State of the United States, Anthony Blinkenwelcomed electoral concessions that President Nicolás Maduro made to the opposition, but said Washington had given him until the end of November to lift bans on opposition presidential candidates and free political prisoners and Americans “unjustly detained”.

A senior State Department official, speaking to Reuters on condition of anonymity, threatened to roll back the relief measures unless Ripe make some decision.

The measurements of USA They follow months of negotiations in which Washington pressured Caracas to take concrete steps toward democratic elections in exchange for lifting some, but not all, of the harsh sanctions imposed during the administration of former US President Donald Trump in 2019.

It also represents a significant step in the administration’s greater commitment Biden with Ripe on issues ranging from energy to migration, moving away from the “maximum pressure” of Trump against the country.

The government of Venezuela and the opposition announced on Tuesday in Barbados an agreement on electoral guarantees that would allow international observation in the presidential elections, whose date they agreed would be in the second half of 2024. But the agreement did not eliminate the prohibitions imposed on the candidates of the opposition to hold public office nor did it mention the release of political prisoners.

Blinken said in a statement that the United States was acting “consistent with our long-standing commitment to providing relief from US sanctions in response to concrete steps towards competitive elections and respect for human rights and fundamental freedoms”.

Wednesday’s announcements eased some of the toughest sanctions Venezuela has faced, but left other restrictions in place, including many against the country’s banking sector.

Still, the US measures could reopen Venezuela’s doors to dozens of oil companies with frozen or reduced operations in Venezuela.

The United States imposed harsh sanctions on Venezuela to punish Maduro’s government after his re-election in 2018 that was described as a farce. Since 2019, US sanctions have limited the commercialization of crude oil from the state-owned PDVSA.

Venezuelan oil sector in trouble

The changes announced Wednesday include the issuance of a six-month general license that allows the production, sale and export of crude oil and gas from Venezuela, without limitations on clients or destinations, and another general license that authorizes agreements with the state gold company. Minerven.

However, the Treasury said in a statement that it was prepared to revoke those authorizations at any time if Maduro’s representatives do not live up to their commitments in the agreement with the opposition.

The Treasury also lifted the secondary trading ban on certain Venezuelan sovereign bonds and the debt and equity of state oil company PDVSA, although a trading ban in the primary market for Venezuelan bonds remains in place, it said.

The United States has been looking for ways to boost global oil flows to alleviate high prices caused by sanctions on Russia and OPEC+ decisions to cut production.

But the chances that Venezuela’s exports can offset those cuts are slim without a big increase in investment in the country’s crippled oil sector, experts said.

Two decades of mismanagement and underinvestment, coupled with U.S. oil sanctions since 2019, are expected to hamper state-run PDVSA’s ability to quickly return to cash-paying oil markets and offer its crude at fair prices.

Talks between the government and the opposition, aimed at finding a way out of Venezuela’s protracted political and economic crisis, took place on Tuesday for the first time in almost a year. They agreed to hold more meetings on an unspecified date.

The agreement they announced says that the opponents can choose their candidate for 2024, in accordance with their internal rules, but did not revoke the disqualifications imposed on some opposition figures – including the favorite in the October 22 primaries, María Corina Machado – that prevent them from holding public office.