U.S. grants Chevron license to pump oil in Venezuela

Date:

Remark

The Biden administration said Saturday it would lift a major oil sanction against Venezuela, marking the first significant crack in a years-long US embargo that could eventually help ease the tight global energy market.

Chevron, the only remaining active US oil company in Venezuela, is part of a joint venture with the country’s state oil company but has been barred from operations there by sanctions. Under a new license from the Ministry of Finance, it can resume oil pumping. The limited license stipulates that all oil produced may only be exported to the United States. The profit from the sale cannot go to the Venezuelan state-owned company, but must be used to pay off Venezuelan creditors in the United States.

The move came as Nicolás Maduro’s government held its first formal talks with the Venezuelan opposition coalition in more than a year. In a meeting Saturday in Mexico City, the two sides agreed to ask the United Nations to manage several billion dollars of government funds held in foreign banks that will be thawed to help ease a humanitarian crisis in Venezuela .

Negotiators also agreed to continue talks next month to discuss a timetable for “free” elections in 2024 and human rights issues.

“We have long made it clear that we believe the best solution in Venezuela is a negotiated solution between Venezuelans,” said a senior Biden administration official speaking on condition of anonymity under White House rules. “To encourage this, we have also said that we are ready to provide targeted relief from sanctions.”

The policy “is open to further calibration of sanctions,” the official said. “But any additional action requires additional concrete steps,” including the release of political prisoners and recognition of the opposition’s legitimacy, as well as unfettered access for UN humanitarian missions.

The official dismissed reports that the government was acting to alleviate an oil shortage and high energy prices exacerbated by the Russian invasion of Ukraine. “Allowing Chevron to source oil from Venezuela will not affect international oil prices. This is really about Venezuela and the Venezuelan process,” the official said, with the United States “supporting a peaceful, negotiated outcome of the political, humanitarian and economic crisis.”

Venezuela has the world’s largest oil reserves, slightly more than Saudi Arabia, although the thick crude oil is more difficult to extract. But production faltered due to poor government management even before Maduro took over in 2013 after the death of Hugo Chávez, a former military officer elected in 1998.

US sanctions against Venezuela, which began 15 years ago on drug trafficking, corruption and human rights violations, gradually expanded and culminated under the administration of Donald Trump. Trump sharply tightened measures against the state oil company Petróleos de Venezuela, SA or PDVSA; the central bank; and individuals and companies. The activities of the American oil companies were almost completely banned there.

The sanctions were an attempt to block global revenues from oil sales, and production fell sharply as exports were sold on the black market mainly to China and India. When the Venezuelan opposition declared the December 2018 elections illegal, it recognized Juan Guaidó, the opposition leader in parliament, as interim president. The United States quickly followed suit and recruited dozens of other Latin American countries to do the same.

But economic and political pressure on Maduro had little effect, and the Venezuelan people suffered from a failing economy and repression, leading millions to flee to neighboring countries, as well as to the United States, where the number of Venezuelan refugees has increased.

President Biden took office believing that Trump’s policy in Venezuela had failed, but he took few steps to reverse it, as powerful lawmakers vowed to block any action and the administration hoped the interim votes of anti-Maduro Venezuelans and others Latin Americans win in Florida. As late as the summer, Biden called Guaidó to assure him of continued American recognition and support, even as other governments and members of Guaido’s own opposition coalition turned away from him and called for negotiations with Maduro.

The Republican electoral defeat in Florida seemed to convince the administration that it was time to move. Chevron officials have said it will take some time to get their operations back on track in Venezuela.

The sanctions change appears to be a deft circumvention of one of the main complaints of US critics: the possibility that it would directly benefit the Maduro government. Under the terms of the license, PDVSA is cut off from any profits the joint venture with Chevron might make.

But Maduro would be no worse off than he is now, and one crack in sanctions could lead to others. For the government, assuming negotiations with the opposition continue towards democratic elections and human rights improvements, any easing of global energy supply is seen as positive.

In a statement Saturday about the resumption of talks in Mexico, Senator Robert Menendez (DN.J.), the chairman of the Senate Foreign Relations Committee and a long-time hardliner for Venezuela, said that “if Maduro again tries to give time to these negotiations, to further consolidate his criminal dictatorship, the United States and our international partners must reverse the full force of our sanctions that brought his regime to the negotiating table in the first place.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

More like this
Related