US Temporarily Lifts Sanctions on Venezuelan Oil and Gas

The United States has lifted sanctions on Venezuelan oil and gas. This decision is temporary, valid for six months, and it “temporarily authorizes transactions.” It was made possible thanks to the agreement announced between the government of Nicolás Maduro and the Venezuelan opposition. The renewal of this license, according to the Biden administration, will depend on Caracas fulfilling its commitments regarding transparency in the elections scheduled in Venezuela for 2024.

Similarly, the U.S. government has called for the release of Venezuelan “political prisoners” and an end to the disqualifications of opposition figures. In a public statement, it was announced that on October 18, the Office of Foreign Assets Control (OFAC) of the Treasury Department issued a six-month license that “temporarily authorizes transactions related to the oil and gas sector in Venezuela.”

End of Sanctions Imposed in 2019

The embargo on Venezuelan oil had been in place since April 2019 when the conflict between President Maduro and the Venezuelan Assembly erupted. The legislature, which had a majority of opposition members, did not recognize the legitimacy of the president, leading to the appointment of the opposition leader Juan Guaidó as the interim Head of State. Guaidó received recognition from over 50 countries, including the United States and the European Union. However, his options as the self-proclaimed interim president dwindled over time as effective power remained with the Chavistas.

Today, the agreement between the Venezuelan government and the opposition aims to ensure democratic presidential elections next year. For now, it has facilitated the U.S. decision, which undoubtedly provides significant relief to the beleaguered Venezuelan economy.

“The United States celebrates the signing of an electoral roadmap agreement between the Unitary Platform and representatives of Maduro. In line with this, the U.S. Department of the Treasury authorizes transactions related to the oil and gas sector and the gold sector of Venezuela, as well as the removal of the secondary trading ban,” says the U.S. statement.

Other Licenses

Similarly, there is a second license that also allows trade with Venezuelan gold. This paves the way for operations with Minerven, the state-owned Venezuelan gold mining company, which, according to the U.S. Treasury, will help reduce the black market.

Furthermore, two licenses were modified to remove the prohibition on trading in the secondary market for certain Venezuelan sovereign bonds, as well as debt and shares of PDVSA, the state-owned Venezuelan petroleum company. However, the ban on trading in the primary market for Venezuelan bonds remains in place.

Satisfaction of the Venezuelan Government

At the Miraflores Palace, Maduro expressed his satisfaction with the measures, which came after months of discreet negotiations, and are particularly welcome given the volatility of oil prices due to the sanctions imposed on Russia following the invasion of Ukraine.

With these agreements, Venezuela is “re-entering the oil and gas market strongly and progressively,” stated the Chavista leader.

Maduro believes that “the first step in the right direction for the gradual and sustained lifting of all sanctions” imposed on Venezuela by the United States has been taken, despite the fact that the U.S. does not recognize Maduro’s 2018 re-election due to alleged fraud.

Agreements with the Opposition

These significant economic decisions are in response to the recent agreement reached between the Venezuelan government and the country’s political opposition in Barbados. At the behest of Norway, talks between the parties began on the small Caribbean island on October 17, and they have already produced the first results.

Thanks to this pact, the international community expects the 2024 presidential elections, which will decide whether the Chavistas continue in power or there is a change, to be conducted democratically and transparently.

In this regard, the Biden administration has emphasized that the lifting of sanctions is partial and that they “will take action if the commitments are not met.” Likewise, in a statement, the U.S. has pointed out that the remaining sanctions on Venezuela “remain in effect.”

Hot Issue: Disqualification of Opposition Candidates

The Venezuelan presidential elections are scheduled for the second half of 2024. The presence of international observers to ensure the transparency of the process has already been agreed upon. However, a significant issue for the international community remains to be clarified: the disqualification of politicians.

On this matter, U.S. Secretary of State Blinken has expressed confidence that Venezuela will define the electoral calendar for 2024 before November. Additionally, they also anticipate the “accelerated reinstatement of all candidates,” notes the U.S. Secretary.

“All those who wish to run for president must have the opportunity and the right to equal electoral conditions, freedom of movement, and guarantees for their physical safety,” defines Secretary Blinken, who expects the disqualifications to be lifted by the end of the year.

One of the individuals in this situation is the opposition former legislator María Corina Machado, who, according to experts, would win a hypothetical internal opposition candidate election. However, Machado has criticized the Barbados agreement because, according to her, it “offers no certainty.”

In this regard, the international community, led by the United States, demands greater progress in Venezuelan political agreements and warns that “non-compliance with the terms of this agreement will lead the United States to reverse the measures we have taken,” as the U.S. Secretary of State has reiterated.