US Reimposes Sanctions on Venezuela’s Oil and Gas Sector

The United States has announced its decision to reinstate sanctions on Venezuela’s oil and gas industry, citing the failure of the Maduro government to facilitate an “inclusive and competitive election.” Last October, the US Treasury Department granted temporary authorization (General License 44) for transactions with Venezuela’s national oil and gas sector, based on President Maduro’s commitment to hold elections in 2024, as outlined in the “Barbados Agreement” between Maduro’s representatives and Venezuela’s political opposition.

Venezuela’s Oil and Gas Sector

However, after a thorough review, US officials determined that the Maduro government had not fulfilled key aspects of the agreement, particularly concerning the exclusion of opposition candidate Maria Corina Machado from the presidential race. Consequently, the US will not renew General License 44, resulting in the reactivation of sanctions within 45 days.

Despite this action, the US will maintain Chevron’s authorization, granted in November 2022, allowing limited operations in Venezuela’s natural resource extraction. This decision comes amidst Venezuela’s economic growth, with the IMF projecting it to be the fastest-growing economy in South America this year.

US officials emphasized that the reinstatement of sanctions does not signify a permanent stance against Venezuela’s electoral process. They reiterated commitment to engaging with all stakeholders, including the Maduro government and the opposition, to support democratic progress in Venezuela.

Regarding potential impacts on oil prices and migration, US officials stressed their focus on Venezuela’s political circumstances. Venezuela’s oil minister expressed readiness to endure the repercussions of US sanctions, asserting that Venezuela will continue to thrive despite external challenges.