(CNN Spanish) — The United States Government decided this Wednesday to reinstate some of the sanctions on Venezuela’s oil and gas sector, senior officials from Joe Biden’s Government informed CNN. The announcement represents the automatic expiration of License 44, which suspended part of the sanctions on Venezuela’s oil sector, and which expired this Thursday the 18th.
The exemption had been published by the US Treasury Department on October 18 with a validity of six months subject to review, within the framework of the progress at that time in the dialogues between the Government of Nicolás Maduro and the majority. opposition represented by the Unitary Platform (PU) in Barbados.
The Office of Foreign Assets Control (OFAC) allowed international companies with License 44 to produce and sell oil and gas from Venezuela, as well as pay for related goods and services, invest, and deliver oil and gas to creditors of the Government of that country, through the United States financial system.
In this way, foreign firms could work without the pressure that any wrong move could be violating the sanctions previously applied by Washington.
Also, through licenses 3I and 9H, modified on the same day, the restrictions on Americans purchasing certain sovereign bonds and bonds or shares of Petróleos de Venezuela in the secondary market had been temporarily lifted.
The flame from a chimney of an oil refining plant is seen along the highway between El Furrial and Maturín in Monagas state, Venezuela, on April 7, 2023. Credit: YURI CORTEZ/AFP via Getty Images
With this relief, Caracas hoped to recover crude oil production, which fell to historic lows in 2019, even below 500,000 barrels of oil per day, due to the economic crisis derived from the controls that the State imposed on the economy and the deployment of sanctions issued to pressure Maduro, who in January of that year was sworn in for his second term as president, after the majority opposition, the United States, the European Union and the countries of the region gathered in the Lima Group, did not recognize the legitimacy of the December 2018 presidential elections.
However, the slow progress in production in the last six months, without moving away from 800,000 barrels per day according to OPEC data, calls into question whether the reimposition of sanctions can generate a drastic drop.
“The expectation was that with this license Venezuela could increase its oil production [en] around 200,000 barrels [diarios] this year. That, plus the possibility of reducing the discount at which oil exports were sold, could allow the country to receive between US$6,000 and 7,000 million annually this year,” explained Alejandro Arreaza, economist for Latin America at Barclays, interviewed on CNN Dinero. .
But the outlook has remained far from that optimistic scenario. “Venezuela today has become a marginal producer in international oil markets, it has a production that is around 800,000, 850,000 barrels. [diarios]which is something similar to what Colombia produces,” added Arreaza.
The economist pointed out that Russia’s war in Ukraine put some attention on Venezuela in the face of the tremors in the oil market, but in the last semester it was seen that the country “does not have the capacity to play that role,” since it did not become a option to replace or mitigate the absence of other markets, at least in the short term.
In this way, Arreaza pointed out that a reimposition of sanctions on Venezuelan oil would not have a significant effect for both the country and the international market.
“The reality is that regardless of the decision that ends up being made, the impact, both for the world oil market and for the Venezuelan economy, could be quite limited,” he concluded.
For its part, despite the expiration of License 44, the American company Chevron, the main oil company operating in the country, will be able to continue working for a while longer, since it does so under another authorization, License 41.
Arreaza said that Chevron has projects in Venezuela with a capacity of 250,000 barrels per day, with current production close to 50% of that goal. “Given the political uncertainty that still exists in the country and the lack of credibility that the government has until now, thinking about new developments, new projects, seems to have a low possibility,” he added.
The Treasury Department has not given specific statements about the future of License 41, granted in November 2022. But it has been explicit about License 44, which from its inception was subject to the Maduro Government allowing the registration of presidential candidates of the Unitary Platform following the Venezuelan legal and constitutional framework.
After the signing of agreements in October, the detente continued in December with the US handover of Alex Saab, a Colombian businessman with ties to Venezuela and whom the Maduro Government describes as a “diplomat”, in exchange for the release of ten Americans detained in Venezuela.
But in January, the State Department warned that the exemption would not be extended after the Supreme Court of Justice, which responds to Maduro, decided to ratify the administrative disqualification from holding public office that weighs on Maria Corina Machado, the winner of the primaries. opponents.
“The actions of Nicolás Maduro and his representatives in Venezuela, including the arrest of members of the opposition and the banning of candidates from competing in this year’s presidential elections, are not consistent with the agreements signed in Barbados,” said the Department of State through a statement obtained then by CNN.
It also moved in that direction by revoking General License 43A, which authorized since October transactions related to Minerven, a Venezuelan state company dedicated to gold mining, and gave a period of two weeks to close all operations with the company or its affiliates. .
Although meetings were held in recent days between representatives of the US and Venezuela, on Monday Maduro downplayed the effects that the reimposition of sanctions could have on the Venezuelan economy. “I tell the negotiators to tell President Biden the following message: ‘If you want, I want, I you don’t want, I don’t want.’ In Caracas: ‘If you want, I want, if you don’t want, I don’t want’. Final point,” he commented on his program Con Maduro +.
