US Reimposes Oil Sanctions On Venezuela

(AP) — The Biden administration on Wednesday reimposed crushing oil sanctions on Venezuela, admonishing President Nicolás Maduro’s attempts to consolidate his rule just six months after the US eased restrictions in a bid to support now fading hopes for a democratic opening in the OPEC nation.

A senior US official, discussing the decision with reporters, said any US company investing in Venezuela would have 45 days to wind down operations to avoid adding uncertainty to global energy markets.

The official spoke on the condition of anonymity to discuss US policy deliberations.

In October, the US granted Maduro’s government relief from sanctions on its state-run oil, gas and mining sectors after it agreed to work with members of the opposition to hold a free and competitive presidential election this year.

While Maduro went on to schedule an election for July and invite international observers to monitor voting, his inner circle has used the ruling party’s total control over Venezuela’s institutions to undermine the agreement. 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 over the past six months, including several of Machado’s aides.

Wednesday’s actions essentially return US policy to what it was prior to the agreement hammered out in the Caribbean island of Barbados, making it illegal for US companies to do business with state-run oil producer Petróleos de Venezuela SA, better known as PDVSA, without a specific licence from the US Treasury Department.

“We again call on Maduro to allow all candidates and parties to participate in the electoral process and release all political prisoners without restrictions or delay,” State Department spokesman Matthew Miller said. “We will continue to support Venezuelans’ aspirations for a more democratic, stable, and prosperous Venezuela.”

Venezuelan authorities angrily dismissed the diplomatic rebuke, saying it fulfilled its commitments made in Barbados and accusing Washington of betraying a promise to lift all sanctions it said was made during secret negotiations between the two countries.

“The gringos think they can threaten Venezuela,” said Maduro in a televised event. “There’s no sanction, no threat, that today can damage our efforts to build a new productive economic model because we no longer depend on anyone in the world, just our own work.”

It’s unclear what impact the snapback would have on Venezuela’s long floundering oil and gas industry — or whether it will pressure Maduro to offer a more level electoral playing field.

The initial reprieve was issued for only six months. Experts say that’s not nearly enough time to attract the major capital investments required 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, instead of going through shady middlemen who charge a hefty fee, Maduro’s government was able to boost oil revenues and raise badly needed cash during the six months of US sanctions relief.

Additionally, the stiffening of sanctions doesn’t directly impact Chevron, the last major US oil driller in Venezuela, which was allowed to boost shipments thanks to a licence it was issued in 2022 amid concerns that Russia’s invasion of Ukraine would disrupt global energy supplies.