LamAmOil: Biden reimposes oil sanctions on Venezuela

The US will re-impose sanctions on Venezuela’s oil and gas sector because President Nicolás Maduro’s socialist regime has “fallen short” on commitments to hold free and fair presidential elections, said the US State Department on April 17.

The six-month general licence for sanctions relief expired early on April 18, just after midnight, State Department spokesman Matthew Miller said.

“We have determined that although the Venezuelan authorities have met some key commitments, they’ve also fallen short in several areas,” said a senior Biden administration official. The official described “a continued pattern of harassment and repression against opposition figures and civil society”.

"We are concerned that Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society," said the spokesman Miller in a statement.

A replacement licence has, however, been issued giving companies until May 31 to "wind down" their business and transactions in Venezuela’s oil and gas sector. This aims to mitigate potential disruptions in global energy markets.

Chevron to continue JV with PDVSA The administration of US President Joe Biden will also allow US supermajor Chevron to continue partnering with PDVSA, or Petróleos de Venezuela, Venezuela’s national oil company. The joint venture was initiated in 2022. Chevron is the last US company operating in the Latin American country.  This is expected to help stop oil prices rising because of the end of sanctions relief. Venezuela has the world’s largest oil reserves. Oil and gas companies had rushed to the OPEC member since sanctions relief began.

Oil and gas companies can in addition still apply for specific licences. The applications will each be considered separately, the US Treasury has said, Reuters reported.

Against this backdrop, earlier this week, the US Treasury Department extended a licence safeguarding Venezuela-owned US refiner Citgo Petroleum from creditors until August 13 ahead of an impending court-ordered auction.

The April 18 move essentially reverts US policy to the situation before the six-month sanctions relief was initiated, rendering it unlawful for American firms to engage with PDVSA without explicit authorisation from the US Treasury Department.

The general licence that’s now expired had allowed Venezuela to sell its crude worldwide. Venezuela's oil exports had surged in March, in part driven by expectations of the licence's expiration.