Venezuela May Face the sanctions as the deadline of 18th April Approaches without any improvement on election front.
In a significant move impacting global geopolitics, the United States has announced its intention to reimpose sanctions on Venezuela’s vital oil industry. This decision comes as a response to what US officials perceive as ongoing repression by President Nicolas Maduro’s government against its political opponents.
The backdrop to this decision is a series of diplomatic maneuvers and escalating tensions between the two nations. The US had set a deadline of April 18 for Venezuela to demonstrate progress, especially concerning the exclusion of Maduro’s opponents from participating in forthcoming elections. Despite some efforts made by Venezuela, US officials have declared that the country fell short in crucial areas, notably in its treatment of opposition figures.
Maria Corina Machado
Of particular concern to Washington is the blocking of Maria Corina Machado, Maduro’s main opponent, from running in the upcoming elections slated for July 28. This action, deemed undemocratic by US authorities, has led to the decision to reinstate sanctions.
The main opposition candidate, María Corina Machado, was banned from running, her selected replacement candidate was not allowed to register and some of her campaign team were arrested. Now the Polls had indicated that Machado would beat Maduro by a landslide.
Cheveron and PDVSA
Eventhough US is likely to impose sanctions the joint venture between Cheveron and PDVSA is likely to continue. Cheveron is a US oil major and PDVSA is the stae owned oil company of Venezuela.
With the temporary lifting of sanctions in October and increased activity in Chevron’s oil joint venture, Venezuela has managed to ramp up crude production to an average of slightly over 800,000 b/d in the first quarter of this year, as reported by OPEC. The sanctions relief has also enabled Venezuela to directly sell its oil without relying on costly black market intermediaries.
Venezuela boasts the world’s largest oil reserves and significant natural gas deposits. Energy firms have capitalized on the sanctions easing, flocking to Caracas in the past six months in pursuit of potential deals with the Maduro government.
In the wake of possible sanctions on Venezuela the oil prices are likely to increase as it controls the supply of oil in the global official market leaving the demand unaffected.
Venezuela May Face Sanctions After Deadline
According to US officials, companies affected by these sanctions will be given until May 31 to wind down their operations in Venezuela. This move is likely to have significant ramifications not only for Venezuela’s economy but also for global oil markets, given Venezuela’s status as home to the world’s largest proven oil reserves.
Despite the looming sanctions, Venezuela’s government remains defiant, vowing to continue its oil production unabated. Petroleum Minister Pedro Tellechea, speaking ahead of the US announcement, asserted that Venezuela would persist in its oil activities regardless of US policy.
The relationship between the US and Venezuela has been fraught with tension for years, with the US rejecting the outcome of Venezuela’s 2018 elections and throwing its support behind opposition leader Juan Guaido. However, despite concerted efforts, including sanctions and diplomatic pressure, Maduro has managed to cling to power with the backing of various international allies, including Cuba, Russia, and China.
The Biden administration’s decision to reinstate sanctions represents a significant shift in approach from the previous administration. While initially following the sanctions strategy of former President Donald Trump, the Biden administration has made many adjustments to its previous stand including permitting Chevron to operate in Venezuela.
The reinstatement of sanctions on Venezuela’s oil sector marks another chapter in the complex and often contentious relationship between the US and Venezuela, with far-reaching implications for both countries and the wider international community.
