U.S. Will Only Extend Venezuela Sanction Relief if Progress Is Made on Elections

The United States will only extend a sanction relief regime for Venezuela if the Maduro government makes progress on commitments undertaken last year to ensure fair elections.

This is according to a Reuters report that quoted a State Department speaker who said "Absent progress by Maduro and his representatives in terms of implementing the road map’s provisions, the United States will not renew the license when it expires on April 18, 2024."

The report comes on the heels of the news that U.S. and Venezuelan officials met in secret in Mexico City to discuss the extension of the relief regime on conditions of Venezuela implementing election reforms.

The United States granted a six-month oil sanction waiver to Caracas in October last year after the two sides discussed election reforms that would have given Venezuela’s opposition a chance in the upcoming vote in July.

However, just months later, the Maduro government effectively banned the opposition’s leader, Maria Corina Machado, from running for office, prompting threats from Washington that the sanctions would snap back.

Following the sanction waiver last October, Venezuela had planned to expand its oil production from below 800,000 bpd to over 1 million bpd. The prospects of that happening have dimmed since then and seem likely to dim even further with three days left for Caracas to signal any willingness to carry out the reforms that the U.S. insists on.

Meanwhile, thanks to the sanction relaxation, Venezuela’s oil exports rose to the highest since 2020 in March. The increase was mainly driven by a rush among buyers to secure cargos ahead of the return of the sanctions.

The return seems almost certain, especially after President Maduro said on Monday on national TV that "We are going ahead with a license or without a license, we aren't a gringo colony."

By Charles Kennedy for Oilprice.com

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