US re-engaging with Maduro triggers release of two US citizens, energy security concerns

Bilateral talks between the US and Venezuela that secured the release of two detained US citizens stoked concerns over who the US may call upon to shore up global oil supplies as it and other countries ratchet up sanctions and other measures against Russia over its invasion of Ukraine.

Most recently, the US imposed an immediate ban on all imports of Russian oil, LNG and coal while the UK committed to a Russian oil import ban by the end of 2022. As the US looks for ways to ease pain at the pump domestically, its conversations with adversarial oil-producing nations have spawned criticism, both at home and abroad, that it might turn a blind eye to past human rights abuses to cut deals with countries that can help bring down prices.

The White House, however, has been adamant that any talks about detained US citizens would happen "through different channels" and not as "a tradeoff."

Secretary of State Antony Blinken, during a press conference March 9, acknowledged that the US has "a set of interests with Venezuela" that includes "maintaining a steady supply of energy through our diplomatic efforts," along with securing the release of unjustly detained Americans and supporting Venezuelans' Democratic aspirations.

He added that "constructive engagements" with the UAE and Saudi Arabia are also taking place with regards to shared interests in "ensuring the stability of global energy supplies" and a multiplicity of other issues.

"We can do all of this while doing what we said we would do from the outset, which was centering human rights in our foreign policy," Blinken asserted. "These priorities are not mutually exclusive. ... We're not going to separate our values from our interests."

Still, Francisco Santos, former Colombian ambassador to the US, called the decision to resume talks with the Maduro regime "brutal."

President Joe Biden "asks for respect for human rights and then he negotiates with a narco-criminal and human rights violator?" he said in interviews with Colombian media. He described the move as a "betrayal" that would likely lead to serious diplomatic strain between Colombia and the US.

House Foreign Affairs Committee Lead Republican Michael McCaul cautioned the Biden administration against "compensating" Maduro in any way for the release of US citizens, in a March 9 statement.

US-Venezuela agenda

The release of the former director of Citgo, Gustavo Cárdenas, who was accused of corruption and imprisoned in 2017, and tourist Jose Alberto Fernandez, arrested in 2021 on charges of terrorism, came just days after a US delegation met with Maduro.

"It was a friendly and diplomatic meeting," Maduro said March 7 in a statement broadcast on local Venezuelan television. "We are ready to recover production. One, two or three million barrels. All in the name of peace."

Maduro added that "there is an agenda ahead," although he did not confirm whether there would be new diplomatic meetings.

His willingness to sell the US oil, a sharp departure from his usual tone of blasting the US as "Imperialist" and "the Evil Empire," fueled questions as to whether sanctions the Trump administration imposed on state-owned PDVSA in January 2019 would be lifted.

Those sanctions cut off flows of Venezuelan crude to US Gulf Coast refiners and others. The Biden administration last year reportedly came close to allowing crude-for-diesel swaps to restart on humanitarian grounds but ultimately decided to keep the ban in place.

White House Press Secretary Jen Psaki told reporters March 9 that the US was encouraged by Maduro's stated plans to resume talks in Mexico with Juan Guaido, the leader of the opposition who the Biden administration has recognized as interim president of Venezuela.

Asked more directly about Venezuela's role in energy security, she responded: "You all know that Venezuela is a large producer of oil, but in terms of any decisions or discussions or where that may go from here, I have nothing to preview or predict for you on that front."

Venezuelan political analyst Jesus Seguías contended that the release of detained Americans is "a small advance towards the necessary agreements between the two countries and is a sign of other concessions that must come their way because both countries have compelling reasons to enter into negotiations that lead not only to resolving bilateral problems but also those related to the Venezuelan opposition."

Venezuelan output

In March, PDVSA and its foreign partners produced an average of 672,800 b/d of crude, according to internal daily production reports reviewed by S&P Global Commodity Insights. This represented a drop from February's 680,000 b/d.

The average Orinoco Belt output was 334,400 b/d, down from the 370,000 b/d reported in February.

Joint ventures between PDVSA and Russia accounted for 47,540 b/d of Venezuela's total crude production.