United States reinstates sanctions against Venezuelan oil and gas

The United States will not renew the license that is set to expire on Thursday and which has led to restrictions being largely eased oil companies Venezuela re-imposes punitive measures in response Failure of the Nicolas Maduro regime to follow through on some election commitments,

Hours before the deadline, the US Treasury Department announced on its website that it had issued replacement licenses to companies 45 days to “cease” its businesses and transactions in the South American country’s oil and gas sector.

Washington had repeatedly threatened to reinstate energy sanctions in recent months unless Maduro fulfilled his promises, following a post-election deal between the government and the Venezuelan opposition to hold free and clean elections. The measures were partially relaxed from October.

Sanctions on Venezuela’s oil industry were first imposed by the government of President Donald Trump 2019

This followed Maduro’s election victory a year earlier, which was rejected by the United States and other Western governments.

While Maduro has fulfilled some commitments under last year’s agreement, he has reneged on other commitments Allow the opposition to present a candidate of their choice against him in the July 28 presidential race, officials told reporters Wednesday.

As a result, Joe Biden’s administration plans to allow existing six-month general licenses to expire without renewal shortly after 0500 GMT on Thursday, the officials said on condition of anonymity.

“Areas where they have fallen short include The incompetence of candidates and parties on technical aspects and what we see as a continuing pattern of harassment and repression against those in the opposition and civil societyAn officer said.

The withdrawal of the most important element of sanctions relief is a major step in Biden’s policy to re-engage with the Maduro government.

However, the Biden administration is not taking a full-on approach to the campaign “Maximum Pressure” Done by his predecessor, Trump.

The United States’ decision comes amid concerns over whether sanctions could be reimposed on Venezuela’s energy sector. Boosting global oil prices and increasing the flow of Venezuelan migrants to the border with Mexico as Biden campaigns for re-election in November.

Biden advisers have struggled in internal deliberations to craft an approach that would punish Maduro but not harm U.S. interests by ending the license that has allowed Venezuela to freely sell its crude, the sources said. Is allowed.

Venezuelan officials have insisted they are prepared for any situation and could face new US oil sanctions.

Oil Minister Pedro Telechea told reporters at the state oil company’s headquarters on Wednesday that PDVSA has “great strength in marketing” to face any scenario. “We are commercially ready. Logically, we will continue production.”

Some companies may be reluctant to invest in the face of Washington’s “unilateral measures,” he said, but most will continue.

Reuters reported this month that Venezuelan oil exports in March reached their highest level since the beginning of 2020 as customers rushed to complete purchases ahead of the expected expiration of licenses.

However, since the easing of sanctions in October, Venezuela has been moving slowly toward rebuilding its production capacity, and its crippled infrastructure and lack of new investment have placed limits on what it can achieve.

Washington has left open the possibility that it may eventually tone down its response. A US official said the latest action “should not be seen as a final decision that we no longer believe that Venezuela can conduct competitive and inclusive elections,” adding that the country would continue to engage with Maduro’s representatives.

Officials said any activity under expired licenses must be completed by May 31, but businesses can still reapply individually for specific licenses. Getting approval will depend on how much the United States decides to allow.

Some authorizations other than the expiring licenses will not be affected, including permission given to Chevron to sell oil from its joint ventures in Venezuela to the United States through 2022, as well as existing approvals for European companies to take Venezuelan oil. Is included.

(With information from Reuters)