The United States is reimposing sanctions on Venezuela’s vital oil sector over what it says is the government’s failure to adhere to democratic principles ahead of elections in July.
The administration of US President Joe Biden said it would not renew a licence that expired early on Thursday, and which had partially eased the punitive measures since October after a US-backed election deal was reached between the government and the Venezuelan opposition in Barbados.
Venezuela’s President, Nicolas Maduro and his representatives have not fully met the commitments made under the electoral roadmap agreement,” said US Department of State spokesperson Matthew Miller.
“Therefore, General License 44 – which authorised transactions related to the oil and gas sector with Venezuela – will expire after midnight and not be renewed.”
As the clock ticked down on the deadline, the US Treasury Department announced on Wednesday that it had issued a replacement licence giving companies 45 days to “wind down” their business and transactions in the OPEC country’s oil and gas sector.
“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,” Miller added.
The government has barred several key political opponents from participating in the July 28 presidential race, despite agreeing with the opposition last October to hold a free and fair vote.
The reimposition of sanctions means that Venezuela’s fuel sales are expected to take a major hit, while US oil companies operating in Venezuela will have to scramble to seek special authorisations.
If the US does not grant enough individual authorisations, PDVSA is expected to resort to little-known intermediaries to sell its oil under price discounts, mainly to Asia.
“We are open [for business], willing to keep progressing along with all foreign companies that want to come,” Venezuela’s Petroleum Minister Pedro Tellechea told reporters after the US announcement.
“Venezuela is ready to secure the stability of global oil markets that we need so much.”
