U.S. considers issuing new oil licenses to Venezuela after sanctions relief expires

Facing a mid-April deadline to decide whether to extend last fall’s temporary suspension of sanctions on Venezuela, the Biden administration is considering how to impose new restrictions on oil sales by President Nicolás Maduro’s government without increasing the number of Venezuelan migrants. , improve the U.S. natural gas price Or anger other Latin American governments.

Trump administration imposes tough sanctions, bans oil sales, Removed in October Maduro has promised to allow competitive presidential elections this summer. Venezuela’s president has since arrested opposition members and banned their leading candidates from running, leading the U.S. State Department to say in late January that it would not extend a six-month suspension of sanctions if Maduro did not make progress. April 18th.

A “general license” issued by the U.S. Treasury Department last year allows buyers around the world to buy Venezuelan crude and pay in dollars, the first time since Trump’s maximum pressure policy effectively removed it from international markets. China has become a major buyer of Venezuela in defiance of U.S. sanctions, while Iran is its main supplier of chemicals. Produces the country’s heavy oil.

The government wants to punish Maduro after he fails to live up to his promises while avoiding losing the benefits of a deal negotiated at the urging of Venezuela’s opposition.

The U.S. Treasury Department would impose a new sanctions regime that would allow Venezuela to continue selling crude oil to international customers but not in the U.S. dollar, the market’s dominant currency, under a proposal.

Instead, Venezuela will pay in its national currency, the bolivar, with debt relief payments deposited directly into its central bank An energy company consultant working in Venezuela’s oil industry said the consultant spoke on the condition of anonymity to protect client confidentiality.

That’s the “most likely” path to take, said a person familiar with internal government deliberations who requested anonymity discussing the sensitive issue. A spokesman for the National Security Council declined to comment.

Biden officials fear political backlash from move Believes concessions to authoritarian leaders must justify new policies It does not represent the interests of the Maduro government, which has repeatedly suppressed democratic opposition.

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Biden moves to reverse Trump policies in 2022 relax restrictions On Chevron, Venezuela has long been a major producer and is allowed to sell Oil produced there is shipped to the United States.The company is not expected to be subject to any additional restrictions A U.S. government official who spoke on condition of anonymity under government rules said that would be the case if the broader general license was revoked.

At the urging of Venezuela’s opposition and companies operating there, government officials began talks with Maduro’s government, drawing the ire of some powerful members of Congress, notably Florida’s two Republican senators, Rick Scott and Marco Rubio, as well as Sen. Ted Cruz (R-Texas).

Critics are skeptical that lifting sanctions will have the desired effect on Maduro.

“When we first lifted sanctions, we gave up leverage … based on a promise that everyone knew he wouldn’t keep,” said Eric Farnsworth, a Latin America expert at the U.N. Council’s Washington office. Farnsworth said. and former State Department officials. “Now that you’re trying to reimpose sanctions, what are the levels of sanctions?”

A return to Trump-era sanctions policies could unsettle key left-leaning governments in the region, particularly Brazil and Colombia, which have struggled with migration from neighboring Venezuela.As an important partner of the United States, India has also become The main importer of Venezuelan oil has more relaxed existing licenses.

“The worst thing that could happen is that we are seen as accepting this bad policy that we inherited from the Trump administration,” said a person familiar with the matter. “Maduro will contest the July elections with all restrictions and put the blame on us. Countries we need to work with us on immigration and other issues “will be eager to normalize relations with Maduro,” and “See us as the aggressors and the regime as the victims.”

The proposed new measures will David L. Goldwyn, who served as the State Department’s special envoy and coordinator for international energy affairs during the Obama administration, said the domestic economy could still be “relieved by providing swaps of natural gas and other refined products for Venezuela’s power, agriculture and natural gas sectors.” “.

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Francesco Monardi, a Venezuelan energy expert at Rice University, said the existing licenses have had a limited positive impact on Venezuela’s cash flow and have not yet opened up wider U.S. market access, in part because of uncertainty over their six-month deadlines. sex. in Houston.

foreign companies, including some Companies from the United States have begun exploring possible new contracts in Venezuela, hoping that the easing of sanctions will continue.But there would be benefits to terminating the license An oil industry business leader speaking at the meeting said that the interests of China, Iran and Russia Conditions of anonymity regarding current uncertain situation to protect the confidentiality of its business.

Through sanctions, the person “U.S. consumers are forced to pay for the country’s poor foreign policy while China buys oil at a discount,” he said.

Maduro’s government banned María Collina Machado, the candidate chosen by the main opposition coalition, from running in the presidential election after corruption allegations were confirmed by the Maduro-appointed Supreme Court. After sweeping the opposition primary, Machado failed to register as a candidate by last Monday’s deadline.she The selected alternative is also blocked from registration. At the last minute, the coalition managed to register a provisional candidate, former Venezuelan diplomat Edmundo González.

Now the country’s historically squabbling opposition is trying to agree on a joint candidate that all factions can support.If the government allows it, the opposition will Gonzalez’s replacement was not recommended until April 20.

Maduro’s electoral hurdles this week drew rare rebuke from the leaders of Colombia and Brazil, whose governments are generally seen as more friendly to Venezuela’s leadership than some other countries in the Western Hemisphere. Brazilian President Luiz Inacio Lula da Silva said on Thursday that Maduro had no legitimate reason to ban opposition candidates from running.

Ana Vanessa Herrero in Caracas contributed to this report.

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By Ali Raza

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