Federal government officials in Washington are working on a draft proposal for sanctions relief to be offered to Venezuela if it organizes "free and fair" presidential elections.
The pitch focuses on letting more companies buy Venezuelan crude, Reuters reported, citing unnamed sources.
"Should Venezuela take concrete actions toward restoring democracy, leading to free and fair elections, we are prepared to provide corresponding sanctions relief," a spokesperson for the National Security Council said, as quoted by Reuters.
U.S. sanctions on Venezuela specifically target the oil industry of the South American country since it accounts for almost all of its export revenues. However, they have failed to stop all oil exports from Venezuela as it had the help of Russia and China to place barrels abroad.
Meanwhile, the U.S. last year allowed Chevron to return to Venezuela, amid a squeeze in the international supply of heavy crude as a result of the barrage of Western sanctions on Russia.
In November, the government granted Chevron a six-month license to operate in Venezuela under its joint ventures with PDVSA there. Profits from the sale of Chevron's Venezuelan-derived crude oil will go towards paying down its debt to Chevron and will not bolster state-run PDVSA's profits.
The move led other companies to ask for the same treatment, including Spain's Repsol and Italy's Eni, both of which have unsettled debt with the Venezuelan state-run oil company.
Meanwhile, the Maduro government has been in talks with the opposition for months but these have so far failed to produce anything constructive. According to some of the Reuters sources, this is because the government side has not signaled readiness to take any steps for fair elections.
Interestingly, the Reuters report notes that should an agreement be reached on the lifting of sanctions, sales of Venezuela oil abroad will remain restricted for three countries: China, Russia, and Iran, because of separate U.S. sanctions on the three.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More