As the deadline swiftly approaches, the U.S. government is poised to reimposition Venezuela oil sanctions unless President Nicolas Maduro fulfills his pledge to hold fair and free elections this year. The current situation presents a significant juncture in U.S.-Venezuela relations, with the imminent expiry of a six-month license that has afforded the South American nation partial sanctions relief since October, following an electoral accord struck with the Venezuelan opposition. This license is set to lapse shortly after midnight EST on Friday, which is 0400 GMT.
Originally, the relaxation of sanctions was contingent on Maduro’s commitment, including permitting opposition candidates to contest freely in the upcoming July 28 election. However, the Maduro administration has only partly adhered to the terms of the Barbados-signed agreement, leaving the U.S. administration contemplating the reinstitution of stringent economic measures.
Furthermore, the Biden administration may withdraw the most significant element of U.S. sanctions relief, showcasing a strategic pivot away from President Joe Biden’s earlier policy of re-engagement with Maduro’s government. Yet, insiders anticipate that the response from the U.S. may fall short of the intensive “maximum pressure” campaign previously waged by former U.S. President Donald Trump.
These developments are set against a backdrop of the U.S. administration’s broader considerations, such as the potential for reinstated sanctions to drive up global oil prices and exacerbate the flow of Venezuelan migrants towards the U.S.-Mexico border—factors especially salient as President Biden prepares for his reelection campaign in November.
U.S. State Department spokesperson Matthew Miller commented on the issue, stating, “We have made very clear that if Maduro and his representatives did not fully implement their agreements under the Barbados agreement, we would reimpose sanctions, and I would just say stay tuned.” Despite this stance, Maduro’s government responds to Washington’s warnings with defiance, with Venezuelan Oil Minister Pedro Tellechea declaring that Venezuela will continue to garner international respect and commerce, sanctions or no sanctions.
However, the U.S. officials have been actively mulling over how far-reaching the sanctions should be. Among the discussed options is the decision to let Venezuela keep exporting its crude while enacting a prohibition on the use of U.S. dollars for such transactions.
Even still, the existing license’s non-renewal does not preclude the possibility of the U.S. issuing a revised version at a later date, should Maduro make progress in upholding electoral promises. In the absence of a general license, Venezuela’s state-owned oil company PDVSA’s foreign partners are left with the pressure of seeking U.S. authorizations, something they have pursued for years without success.
The temporary thaw in U.S.-Venezuela relations initiated when the U.S., seeking alternatives to Russian oil amid price hikes prompted by Western sanctions over Russia’s 2022 Ukraine invasion, agreed to soften some of the harsh sanctions imposed on Caracas during the Trump era. Following these concessions, Miller noted that Maduro has honored specific aspects of the Barbados agreement, such as setting an election timeline and welcoming international observers.
Yet issues persist, as Venezuelan electoral authorities have upheld a ban on Maria Corina Machado, the popular opposition primary winner, leaving the opposition in internal negotiations for an alternative candidate. This, coupled with the U.S. and other Western governments’ rejection of Maduro’s 2018 re-election as fraudulent and recent arrests of opposition figures, amplifies tensions as the sanctions deadline looms—a critical moment with potential to shape both nations’ futures.
