The U.S. is preparing to ease sanctions on Venezuela’s oil in return for a pledge to hold free and fair internationally monitored presidential elections in 2024, the Washington Post reports, citing two anonymous sources. The report claims that Venezuelan President Nicolás Maduro will sign a deal with the country’s U.S.-backed opposition during a Tuesday meeting in Barbados, with U.S. officials standing by. That deal will allegedly see Maduro lift the bans on opposition presidential candidates.
Once the deal is signed, the report claims, oil sanctions will be eased, though the anonymous sources indicated that any easing of sanctions could be temporary should the election process not proceed in line with the deal.
There is not yet any sense of the details surrounding the process of easing oil sanctions; however, a senior Biden administration official told the Washington Post that Venezuelan assets in the U.S. would not be unfrozen in the deal.
While details remain vague and there has been no official on-the-record corroboration of the Washington Post account citing unnamed sources, those sources indicated that part of the sanctions easing process could see Venezuela’s state-run oil agency restart business in the U.S. under a new general license to operate.
Venezuela is home to the largest crude oil reserves in the world, though production has been in decline due to corruption and lack of investment in and mismanagement of state-run PDVSA. In 2022, production hit a 50-year low of ~700,000 bpd. Late last year, Washington eased some sanctions on Venezuela, allowing Chevron to resume work in the country to enable exports to make up for lack of access to Russian heavy crude as a result of the war in Ukraine.
In July, Venezuela’s oil exports were estimated to have surged to nearly three-and-a-half-year highs, thanks to increased shipments by Chevron and new supply contracts signed by PDVSA.
In August, Chevron’s exports to U.S. refineries fell to around 147,000 bpd in August, down from 161,000 bpd in July.
Last month, Venezuela exported 544,000 barrels per day (bpd) of crude oil, down by 38% compared to over 877,000 bpd shipped in July.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com