According to the White House, Venezuelan President Nicolas Maduro has not upheld his half of the agreement to allow free and fair elections, and US sanctions on the country’s oil exports will most certainly be reinstated by the end of the week.
Tanker operators serving the Venezuelan market have already initiated “dark-fleet” sanctions evasion ahead of the expected restrictions, according to TankerTrackers.com.
In October, American authorities reached an agreement with Maduro’s government to eliminate long-standing sanctions on Venezuelan petroleum in exchange for Maduro loosening limitations on the country’s election system. The agreement called for the dictatorship to negotiate with an opposition party to set terms for the next presidential election, which is planned for July 2024.
That has not occurred, according to the White House. Despite some progress, “Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society,” State Department Matthew Miller said in a statement.
United States officials met with Maduro’s emissaries in Mexico last week to provide a final warning, but little progress has been achieved, the White House quietly informed reporters on Wednesday. The waiver will expire, and sanctions will go back into force over the next six weeks.
Even if sanctions are reinstated, some oil corporations will be permitted to continue operating in Venezuela under special permits on an individual basis. Chevron, which has strong economic interests in Venezuela and received its own unique license in November 2022, could be a potential candidate.
Reimposing sanctions on Venezuelan exports will increase political risks for the Biden administration. If the sanctions regime harms Venezuela’s damaged economy, more people may pour northward toward the US border. Sanctioning Venezuela’s oil exports may potentially raise the global price of crude, though Venezuela will still be able to find enough customers and supply chain partners to mitigate the supply-side consequences of the prohibition.