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Biden administration begins easing Venezuelan oil restrictions with Chevron

Highlights

Chevron waiver was due to expire June 1

Opposition leader Guaido denies involvement

  • Author
  • Jasmin Melvin    Mery Mogollon
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Natural Gas Oil

Republican lawmakers May 17 were quick to condemn steps the Biden administration reportedly took to ease oil sanctions on Venezuela for Chevron to negotiate and potentially restart operations in the country.

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Media reports May 17 indicated that the US Treasury Department issued a license to Chevron to resume talks with the regime of President Nicolás Maduro in an effort to facilitate discussions between the ruling government and the US-backed opposition.

The White House, Treasury, State Department and Chevron did not immediately respond to requests for comment.

Venezuelan Vice President Delcy Rodríguez, however, tweeted that media accounts of the US authorizing US and European oil companies to negotiate and restart operations in Venezuela were accurate.

"Venezuela aspires that these decisions of the US pave the way for the absolute lifting of the illegal sanctions that affect all of our people," she added on Twitter.

But the press office of opposition leader Juan Guaido released a statement denying that Venezuela's Unitary Platform had asked for any personal sanctions to be lifted as part of negotiations.

"Reaching any agreement could only happen to the extent that concrete steps are achieved for freedom and democracy in Venezuela," the statement read.

Bilateral talks between the US and Venezuela that secured the release of two detained US citizens in March 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.

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.

"Our experience buying Russian energy should have taught President [Joe] Biden that buying energy from tyrants is a dangerous proposition," said Senator John Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, referencing the "Biden administration's decision to ease sanctions on Venezuela."

The Wyoming lawmaker has been adamant that Biden's energy policies have stifled domestic oil and gas production. "Funding despots isn't in the national interest. Supporting American energy is," he said.

House Foreign Affairs Committee Lead Republican Michael McCaul said the shift in policy towards Venezuela was "empowering the Maduro dictatorship and weakening our ability to bring home American hostages detained in Venezuela."

"Economic pressure is one of the only ways to compel the regime to act in good faith," McCaul said. "Unilaterally waving that pressure will not only incentivize the regime to continue its illegality, but it will also finance their corrupt actions. And to make it worse, the administration is pursuing this policy based on a failed negotiation process facilitated by Russia."

Sanctions imposed in 2019

The Trump administration imposed sanctions on Venezuela's state-owned PDVSA in January 2019. 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.

The Treasury in November extended a waiver until June 1, 2022, that allowed Chevron to continue limited operations in Venezuela. That waiver, known as General License 8, was extended on the argument that the presence of US companies would be necessary to prevent the collapse of Venezuela's oil sector and ease an expected recovery once Maduro was forced out of power.

However, Maduro has held onto power despite US pressure, with his party sweeping the country's local and regional elections last year.