LatAmOil: Negotiating room left in the US’s Venezuela oil sanctions

Despite US oil sanctions returning to Venezuela, there's still space for negotiation with the Maduro-led administration via special licences, say Rystad Energy and other analysts.

Jorge León, senior vice president at Rystad Energy, noted the nuanced US approach. He asked whether it is a full return to the 'maximum pressure' campaign – imposed during the Trump-era – or is there a middle ground this time around? The latter seems more likely, he said.

On April 18, the US re-imposed sanctions on Venezuela’s oil and gas sector because President Nicolás Maduro’s socialist regime had so far “fallen short” on commitments to hold free and fair presidential elections, said the US State Department.

Henceforth, US entities seeking to engage with PDVSA must obtain individual authorisations from the Treasury Department, subject to case-by-case evaluation, it said.

"This means that it again becomes illegal for US-based companies to deal in Venezuelan oil," León told Rigzone, commenting on the implications of the decision.

Exceptions include Chevron, allowed to produce and export oil to the US under General Licence 41. Chevron is a prominent player in Venezuela's oil industry. It aims to hit 200,000 barrels per day of exports to the US from Venezuela by year-end. The US supermajor has already reached 170,000 bpd.