When Biden sent a delegation to Caracas in early March, rumors began to circulate that the U.S. was considering reopening relations with Venezuela as oil prices soared. Now, after a period of silence from Washington on the subject, it appears that the U.S. is going to ease its sanctions on the Latin American oil giant. At the same time that the U.S. is lifting some sanctions, Venezuela is working with Iran to help revive its oil industry. It seems geopolitics has taken a back seat to the global energy crisis as oil prices soar. The U.S. imposed oil sanctions on Venezuela under the Trump administration in 2019 due to ongoing human rights violations by President Nicolás Maduro. Under President Biden, there were discussions about reopening some trade links by allowing crude-for-diesel exchanges on humanitarian grounds, although this never came to fruition. However, the U.S. oil and gas firm Chevron has been allowed to continue limited operations in Venezuela in order to help avoid the collapse of the country’s oil industry. There has been speculation in recent months around whether Biden would ease restrictions on Venezuela in response to global crude shortages and a severe rise in oil prices, with several commentators highlighting the dangers of such a move.
The White House announced in May that it was reconsidering its restrictions on Venezuelan oil, entering discussions with Maduro. Biden will now allow Chevron Corp. to negotiate its oil license with state-owned oil producer Petroleos de Venezuela (PDVSA), thereby reducing certain sanctions on the oil-rich state. Although no further oil drilling or additional revenues for the Maduro government will be permitted. The move follows a meeting between US officials and Maduro in March to discuss how to move forward.
Venezuelan Vice President Delcy Rodríguez confirmed rumors about the shift in policy by tweeting “Venezuela aspires that these decisions of the United States of America pave the way for the absolute lifting of the illegal sanctions that affect all of our people.”
But the Republican opposition has been quick to criticize Biden’s actions. Senator John Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, strongly opposes the easing of sanctions on Venezuela, stating “our experience buying Russian energy should have taught President [Joe] Biden that buying energy from tyrants is a dangerous proposition.”
The White House apparently responded to a request by Maduro’s political opposition to ease sanctions, although the opposition said that the request came from Maduro. The Biden Administration hopes that dangling oil industry allowances in front of the president may encourage him to make greater political concessions with the opposition, putting Venezuela on track for free and fair presidential elections in 2024.
This possibility was mentioned in a report previously featured at this site. Clearly the very high fuel prices are exacerbating the very high inflation rates.