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US easing Venezuela oil sanctions after election deal

by Mark Mendoza

The Biden administration has made a significant move by easing sanctions on Venezuela’s oil and gas sector. This decision comes in response to a recent election deal reached between the Venezuelan government and the country’s opposition.

The US Department of the Treasury announced the broad easing of sanctions, stating that it is in response to “democratic developments” in Venezuela. The Treasury Department has issued General Licenses that authorize transactions involving Venezuela’s oil and gas sector, as well as the gold sector. Additionally, the ban on secondary trading has been removed.

However, the Treasury Department made it clear that these authorizations can be amended or revoked if President Nicolas Maduro’s government fails to follow through on their commitments outlined in the election deal with the opposition. The Biden administration is closely monitoring the situation and will take appropriate action if necessary.

The changes in sanctions include the issuance of a six-month general license for the oil and gas sector in Venezuela, allowing for increased economic activity in this area. Another general license has been issued that authorizes dealings with Minerven, which is the state-owned gold mining company in Venezuela.

Furthermore, the Treasury Department has removed the ban on certain Venezuelan sovereign bonds and state-run oil company PDVSA debt and equity regarding secondary trading. However, it’s important to note that the ban on trading in the primary Venezuelan bond market remains in place.

This decision by the Biden administration marks a significant departure from the approach taken by former President Donald Trump, who pursued a “maximum pressure” campaign against the socialist-governed country. The Biden administration has chosen a more engaged approach with Maduro’s government, focusing on issues such as energy and migration.

The US moves come after months of negotiations between Washington and Caracas, wherein the US pressed for concrete actions toward democratic elections in exchange for the lifting of some sanctions. This easing of sanctions is seen as a positive step forward in the Biden administration’s efforts to encourage democratic reforms in Venezuela.

However, it’s important to remain vigilant and monitor the situation closely. The Biden administration has made it clear that it will not hesitate to reverse the easing of sanctions if Maduro’s government fails to meet its commitments, including lifting bans on opposition presidential candidates and releasing political prisoners.

Overall, this decision marks a significant shift in US policy towards Venezuela and underscores the Biden administration’s commitment to engagement and diplomacy in resolving the ongoing crisis in the country.

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