The United States has announced that it will not renew a temporary license that provided significant sanctions relief for Venezuela’s oil and gas sector unless President Nicolas Maduro demonstrates progress on commitments for free and fair elections this year. The State Department spokesperson emphasized that the U.S. is closely monitoring Maduro’s adherence to the agreed road map’s provisions, stressing that the license will not be renewed if substantial progress is not made by the specified deadline of April 18, 2024.
The Biden administration remains skeptical about Maduro’s willingness to make sufficient concessions before the impending deadline and has expressed concerns about the electoral process in Venezuela. The U.S. previously provided partial sanctions relief in response to an election deal reached between Maduro’s government and the opposition, which included provisions for the opposition to select its own presidential candidate.
The potential expiration of the current license has prompted a surge in Venezuela’s oil exports, with customers rushing to complete purchases ahead of the predicted deadline. While the Biden administration is considering a range of options, it is expected to stop short of a full return to the Trump-era “maximum pressure” policy. Possible measures under consideration include allowing Venezuela to continue selling its crude on world markets but reinstating a ban on the use of U.S. dollars in such transactions, potentially requiring Venezuela to switch to other currencies and expand barter arrangements and swaps.
The decision not to renew the license has significant implications for Venezuela’s oil sector and the country’s broader economic landscape. The U.S. Treasury Department also extended a license protecting Venezuela-owned refiner Citgo Petroleum from creditors, underscoring the multifaceted impact of the U.S. stance on Venezuela’s energy industry.
The situation in Venezuela remains a focal point for U.S. policymakers, with considerations for potential repercussions on global oil prices and the flow of Venezuelan migrants to the U.S.-Mexico border. As the expiration deadline approaches, Venezuela’s opposition is engaged in internal negotiations about candidate selection for the upcoming elections, reflecting the broader impact of the U.S. position on Venezuela’s political and electoral dynamics.