Washington Preparing to Reimpose Venezuela Oil Sanctions Thursday

The Biden administration is potentially gearing up to reimpose oil sanctions on Venezuela, as President Nicolas Maduro violates the conditions of the existing temporary sanctions relief in his attempt to quash the opposition ahead of this year's elections. On Wednesday, the Biden administration signaled that sanctions could be implemented anew when the six-month temporary deal expires on Thursday. 

Elections in Venezuela are scheduled for July 28, and Maduro has tirelessly worked to ban opposition candidates by using trumped-up criminal charges to keep them off the ballot, along with arresting many opposition figures for allegedly plotting a coup against him. 

While the Biden administration has been following a strategy of re-engagement with Venezuela, certain conditions must be met for the continuation of sanctions relief. 

Unnamed Bloomberg sources also said on Wednesday that Washington was planning to allow the sanctions relief to expire on Thursday at midnight if Venezuela fails to appease the Biden administration. 

Bloomberg sources are considering that there is some potential for sanctions to be continued if the Venezuelan government extends the deadline for registering candidates to run in the July elections, or if governor Manuel Rosales is chosen by the opposition as he is the only opposition figure willing to negotiate directly with Maduro, which renders him a less-attractive individual among the opposition. 

Last week, the U.S. held secret meetings with Venezuela, but the results of those talks have yet to manifest themselves into concrete action. 

The sanctions are expiring in tandem with new negotiations between Venezuela and Chevron to expand a joint venture with state-run PDVSA in the Orinoco Belt, Reuters reports. 

Since sanctions were waived in October 2023, Venezuela has pursued a strategy of expanding oil production from below 800,000 bpd to over 1 million bpd, though the ambitious goals cannot be achieved if sanctions relief is allowed to expire.  

The easing of the sanctions helped Venezuela boost its oil export revenues, with expectations for this year at $20 billion, according to Reuters estimates from January, versus a total of $12 billion in oil revenues for last year.

By Charles Kennedy for Oilprice.com

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