US Lifts Venezuela Oil Sanctions for Six Months

Facts

• On Wednesday, the Biden administration announced the lifting of an array of sanctions on Venezuela's oil and gas sector, allowing the country to temporarily produce and export the resources without restrictions.¹
• The announcement follows the Venezuelan government and the US-backed opposition's decision to hold presidential elections in the second half of 2024 following the resumption of talks after a nearly year-long hiatus.²
• Welcoming the deal between the warring sides, the Treasury granted a six-month general authorization for transactions in Venezuela's oil and gas sector and a separate license for dealings with the state-run gold mining company Minerven.³
• The Treasury also amended two key licenses, lifting the ban on secondary trading in certain Venezuelan sovereign bonds along with debt and equity shares of state-controlled oil company PDVSA. The ban on trading in the primary market for Venezuelan bonds remains effective.⁴
• The Treasury added that some or all newly issued licenses could be revoked should the Maduro government fail to follow through on the agreed electoral framework. According to analysts, Venezuela's oil output could climb by 25% after the easing of sanctions.⁵
• Also on Wednesday, the first US deportation flight to Venezuela, carrying about 130 migrants, landed in Caracas. Over 7M citizens have fled Venezuela, which holds the world's largest proven oil reserves, due to a deep economic crisis compounded by oil sanctions.⁶

Sources: ¹Reuters, ²Verity Lite, ³ABC News, ⁴U.S. Department of the Treasury, ⁵OilPrice and ⁶Washington Post.

Narratives

• Establishment-critical narrative, as provided by Venezuelanalysis. The lifting of key US sanctions is a significant success for the Maduro government and the sovereignty of Venezuelans. After years of failed attempts to destabilize the country, Washington has finally come to its senses, partly due to the US migration crisis and rising global energy costs. However, while easing economic sanctions aimed at paralyzing the country's economy is a significant first step, the Venezuelan people are demanding their complete removal. Caracas will continue to fight for Venezuela's right to a self-determined future.
• Pro-establishment narrative, as provided by Washington Post. That the US has eased sanctions on Venezuela due to negotiations with Caracas is an intelligent move by the Biden administration. Washington's offer was crucial in getting the Maduro government to agree with the opposition on a roadmap for elections and releasing wrongfully detained US citizens. If Caracas wants to avoid the reimposition of sanctions, it must now ensure fair and competitive elections. The US will closely monitor developments and continue to advocate for human rights and democracy in Venezuela.

Predictions