Biden to Reimpose Sanctions on Venezuelan Oil and Gas

T.J. Muscaro
By T.J. Muscaro
April 17, 2024Americas
Biden to Reimpose Sanctions on Venezuelan Oil and Gas
President of Venezuela Nicolas Maduro speaks holding a small constitution book during a demonstration to commemorate 22nd anniversary of failed coup d'etat against Hugo Chavez in Caracas, Venezuela, on April 13, 2024. (Jesus Vargas/Getty Images)

The Biden administration has decided not to renew the sanction-lifting general license with Venezuela.

Senior administration officials said on April 17 that the Maduro regime in Venezuela failed to meet the conditions set in the Barbados Agreement signed in October, specifically in ensuring free and fair elections later this year.

The Biden administration said the Treasury Department would be issuing a new general license which sets a 45-day “wind down” window for ongoing transactions with Venezuelan oil and gas sector operations.

“We’ve remained in very close touch with a range of stakeholders to assess the Venezuelan authorities’ progress on implementing the Barbados agreement, which is intended to allow for an inclusive and competitive election in 2024,” one senior administration official said. “Over the past several months … we’ve completed a very careful review, and we’ve determined that although the Venezuelan authorities have met some key commitments, they’ve also fallen short in several areas.”

Department of State spokesperson Matthew Miller released a statement confirming General License 44 would expire at 12:01 a.m. on April 18, and once again calling upon Mr. Maduro to release all political prisoners “without restrictions or delay” and allow all candidates and parties to participate in the election.

“We will continue to support Venezuelans’ aspirations for a more democratic, stable, and prosperous Venezuela,” Mr. Miller said. “We and our partners in the international community urge Maduro to uphold all the commitments made under the electoral roadmap established by the signatories of the Barbados Agreement.”

Those areas included disqualifying candidates and political parties on technicalities and what officials see as “a continued pattern of harassment and repression against opposition figures,” specifically noting the ban put on María Corina Machado and her chosen alternative candidate, Corina Yoris.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced on Oct. 18 that the Biden administration eased oil and gas sanctions on Venezuela based on the agreement that its socialist government—controlled by the dictator Nicolas Maduro—and its opposition would take steps to ensure freer and fairer elections.

The South American nation was sanctioned in 2019 by then-President Donald Trump in response to Mr. Maduro’s corruption. However, under President Biden, the Treasury Department issued a six-month general license temporarily authorizing transactions involving Venezuelan oil and gas.

“The United States welcomes the signing of an electoral roadmap agreement between the Unitary Platform and Maduro representatives,” Brian Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, said in a statement at that time.

Loss of Confidence in Venezuela

Secretary of State Antony Blinken emphasized that the lifting of sanctions was a “concrete step toward resolution of Venezuela’s political, economic, and humanitarian crisis and urged the country to release all wrongfully detained U.S. nationals as well as Venezuelan political prisoners,” though the deal did not mention the release of the at least four Americans who were being detained at that time.

Mr. Blinken also said that the United States and the international community would “closely follow” Venezuela’s progress and that the U.S. government would “take action if commitments under the electoral roadmap and with respect to political prisoners are not met.”

Senior administration officials said on April 17 that the decision not to renew the general license should signify that they no longer believe that Venezuela will have a “competitive and inclusive election.” They plan to continue to “engage with all stakeholders” to help the Venezuelan people “ensure a better future,” and they affirmed their position that “the Barbados agreements still represent the best available path for a more democratic, secure and prosperous Venezuela.”

Any activity with respect to Venezuela’s oil and gas sector allowed under General License 44 must cease by May 31. However, another senior administration official clarified that this does not necessarily mean that all oil and gas-related business would end.

Individual companies can apply for specific licenses to engage in activities regarding Venezuela’s oil and gas sector with OFAC.

“The process of evaluating a specific license included is not public, but it does include taking into consideration the national security interest and foreign policy interests of the United States through close consultation with and receipt of foreign policy guidance,” the senior administration official said. That official was also unable to clarify the status of those case-by-case licenses.

Venezuela is home to the world’s largest proven oil reserves, and the decision to end the general license comes as President Biden continues to pull back on domestic oil production.

Energy Production

A new report from the Institute for Energy Research showed that President Joe Biden took more than 200 actions against the U.S. oil and gas industry since he took office in January 2021, beginning with revoking the March 2019 permit for the Keystone Pipeline and canceling all oil and gas leasing activities in Alaska’s Arctic National Wildlife Refuge, as well as revoking decreased regulations under a Trump-era executive order on his first day in office.

He also canceled new oil and gas leases on public lands and offshore waters.

Most recently, Sen. Dan Sullivan (R-Alaska) told Fox News that the Department of Interior was expected to finalize new regulations that would block 13 million acres of land in Alaska’s North Slope Borough called the National Petroleum Reserve.

“It is remarkable that during these dangerous times the Biden Admin is more focused on sanctioning Alaska and Alaskans than sanctions on the terrorist regimes in Iran and Venezuela—allowing them to drill baby drill!” Mr. Sullivan said on X.

In the lead-up to the administration’s decision, seven senators led by Mr. Sullivan submitted a letter urging President Biden not to renew the general license with Venezuela, arguing the Maduro regime “has failed to uphold its promises and deliberately violated the boundaries of that agreement.”

Sens. Bill Hagerty (R-Tenn.), John Barrasso (R-Wyo.), Pete Ricketts (R-Neb.), Jim Risch (R-Idaho), Marco Rubio (R-Fla.), and Rick Scott (R-Fla.) co-signed the letter.

“We must not cede American leverage by lifting U.S. sanctions while the Maduro government deliberately disregards its obligations,” the letter states. “If the U.S. fails to take a credible stance on ensuring free and fair elections are held in Venezuela, the prospects of a democratic Venezuela will continue to diminish, which will further embolden authoritarian aggressors such as the People’s Republic of China (PRC), Iran, and Russia.”

Senior administration officials declined to provide any expectation on how the termination of the general license would affect global oil prices or how this could affect the influx of illegal immigration from the nation to the United States.

Andrew Moran, Jana J. Pruet, and Katabella Roberts contributed to this report.

From The Epoch Times

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