US may lift Venezuelan oil sanctions

In exchange for oil, the US may lift sanctions on Venezuela.

If Caracas agrees to “free and fair” elections, Chevron may be able to drill for oil.

WSJ reported on Wednesday that Washington is getting ready to partially ease sanctions on Venezuela in order to get Chevron’s permission to start pumping oil again in the South American country.

The government of Venezuelan President Nicolás Maduro will have to meet with the opposition to “discuss the conditions needed” for “free and fair” presidential elections in 2024. In exchange, the government will get “significant sanctions relief,” the publication said, citing people who know about the situation.

Reports say that Washington, Caracas, and some Venezuelan opposition leaders have made a deal that would free up some of the Venezuelan state funds that have been frozen in American banks. These funds could then be used to pay for food, medicine, and equipment for utilities.

Moving Markets

After putting a ban on Russian oil in the US and a partial embargo on it in Europe, Washington turned to Venezuela for oil relief. Over the past few months, it has shown signs that it may ease economic pressure on Caracas, including letting it export more oil. Before the war in Ukraine, the EU got about 30% of its oil from Russia.

In June, it was said that the US had given the go-ahead for Eni and Repsol to ship Venezuelan oil to Europe as part of an oil-for-debt deal. Reports say that Caracas stopped the shipments in August and asked Eni and Repsol to give it fuel instead of future shipments.

The US has put sanctions on Venezuela for more than 15 years, even though it has the largest known oil reserves in the world. As part of the latest set of restrictions, which were put in place in 2019 because of claims of election fraud, all Venezuelan government assets in the US have been frozen and any business with US citizens or companies has been banned.

Chevron is still in Venezuela, but it can’t drill for crude oil there. The WSJ says that if the deal goes through and Chevron starts drilling again, it would only put a small amount of new oil on the world market in the short term.


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