Sanctions Again? U.S. Set To Revoke Venezuela Oil License

The White House is ready to renew sanctions on Venezuelan oil, according to Bloomberg, which contacted U.S. officials with information on the matter.

The move would come if the ban on opposition candidate and frontrunner Maria Corina Machado is not revoked, as it was upheld by the supreme court on Friday.

The Biden administration would not renew General License 44, which lets U.S. citizens buy Venezuelan crude. It is set to run until April 18th, when it would have to be renewed or suspended.

The sources also said there could be other measures to punish Venezuela. Previously, many commentators believed that oil sanctions would not be touched and instead, the Biden administration would pick smaller targets.

The nature of the license also gives time before sanctions are reimposed. Therefore, we can expect negotiations and further measures taken from either side, meaning from both the governments of the U.S. and Venezuela.

Machado was elected in opposition primaries in October, although she faced a ban from the comptroller general. She has since argued that the ban is non-existent and unconstitutional.

As part of agreements between Washington D.C., Caracas, and the Venezuelan opposition, a process was opened up whereby Machado and other candidates could challenge their ban.

Last week the supreme court ratified the ban, although many have accused the decision of being politically-motivated rather than judicial. Machado is accused of taking part in corrupt activity as the U.S. and opposition parties seized Venezuela’s overseas assets; that she had represented a foreign power as she spoke for Panama at the Organization of American States; and that she called for economic sanctions and a military invasion against her own country.

This month, there have also been arrests of supporters of Machado and her Vente Venezuela party. The government accused them of being part of a destabilization efforts.

After the supreme court decision, lead opposition negotiator Gerardo Blyde said the “Barbados Accords” with the government were partially broken but he was open to negotiate.

Speaking after the Bloomberg article, government heavyweight Jorge Rodriguez said in a public appearance that he welcomed the Norwegian proposal to negotiate, and “we will try to sustain the Barbados Accords, despite how they have been attacked.”

The Biden administration is entering an awkward position, just as it was arguing that economic sanctions—a legacy from former President Donald Trump’s years—were a failed policy. Juan Gonzalez, who is leading Venezuela policy from the National Security Council, was among those making this case.

Earlier this month, the Congressional Research Service said that U.S. financial and sectoral sanctions “failed to dislodge Maduro and contributed to an economic crisis in the country that has prompted 7.7 million Venezuelans to flee.”

The most significant were those targeting the financial system in 2017 and oil exports in 2019. Since last year, they were being revised as part of a process to promote a free and fair electoral process. Most sanctions still remain in place.

These sanctions, affecting the entire country, were originally meant to starve Venezuela of resources and thus trigger regime change. Some experts have found such sanctions to be similar to siege warfare.

Since then, the Biden administration has been using the removal and reimposition of country-wide sanctions to force concessions from the Maduro government.

Alternatively, there has been no revision of sanctions on individuals since Trump’s presidency, or an attempt to move policy beyond targeting the Venezuelan economy at large.

In a recent interview, Luis Vicente Leon explored some possible consequences of renewing harsh sanctions on Venezuela. The economist and professor is the president of Datanalisis, a polling firm. They could include a radicalization of the government against the opposition, or a breakdown of migration agreements; the latter has become a key issue for the U.S. presidential race.

Meanwhile this week, Venezuela’s defaulted debt is due to enter the JP Morgan Emerging Markets Bond Index. A statement from the research department said that it will be moving ahead as usual, as lifting restrictions on trading such bonds has a “stand-alone merit”. Therefore, “the Venezuela/PDVSA Index Watch observation period is set to finalize this upcoming Wednesday, January 31st, 2024.”