The White House is moving ahead with easing sanctions on Venezuela’s government, in a bid to boost the global oil supply after slapping Russia with restrictions on its crude exports.
With oil persistently sitting above $100 per barrel since Russia’s military operation in Ukraine and the West’s subsequent condemnation of Moscow, the Biden administration is finally realizing that it cannot, after all, sanction everyone who doesn’t align with the West’s foreign policies if it wants to keep energy prices from spiralling out of control.
After blacklisting energy imports from Russia in retaliation for Vladimir Putin’s military operation in Ukraine, the US was forced to rethink its energy policies with its other foe, Venezuela, in an effort to make up for shortcomings in the world’s supply of oil. With efforts to persuade OPEC and its allies to boost crude output falling on deaf ears, the Biden administration put its diplomats to work to devise a way to lift sanctions on Venezuela’s energy infrastructure.
According to government officials cited by the Washington Post, the Biden administration decided to follow through with allowing US crude giant Chevron to revamp its Venezuelan oil infrastructure and renegotiate its license with state-owned oil company PDVSA. However, the easing of restrictions still do not allow Chevron to drill or export petroleum products that are of Venezuelan origin, and a number of Venezuelans, including the attorney general and over 140 entities, will still remain sanctioned.
Nonetheless, the warming of relations between the two countries comes after White House representatives met with Venezuelan president Nicolás Maduro and the country’s main Unitary Platform opposition back in March. “These are things that … the Unitary Platform negotiated and came to us to request that we do in order for them to be able to return to the negotiating table,” one of the officials told the Washington Post.
Chevron remains the last US-based oil company still conducting business in Venezuela, producing about 200,000 barrels of oil per day up until 2019. The following year, the US government ordered the firm to shutter output, permitting only essential maintenance on existing oil wells.
Information for this briefing was found via the Washington Post. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.