US temporarily lifts Venezuela oil sanctions

Market: Crude oil
18/10/23

The US will temporarily lift some of the key sanctions targeting Venezuela's oil and gas sector after Venezuela's government and an opposition coalition agreed to work together to ensure free and fair presidential elections due next year.

The US has welcomed agreements concluded on Tuesday between Venezuelan president Nicolas Maduro's government and the Unitary Platform opposition. The US Treasury Department today issued a reprieve authorizing transactions with the Venezuelan oil and gas sector, valid for six months. Treasury said it is prepared "to amend or revoke authorizations at any time, should representatives of Maduro fail to follow through on their commitments."

The sanctions waiver will only be renewed if Venezuela meets its commitments under the electoral roadmap and releases unlawfully detained individuals, Treasury said.

In November 2022, the White House eased sanctions on Venezuela to allow Chevron to increase oil production in its joint ventures there with state-owned PdV. It has exported about 165,000 b/d since then to the US.

Chevron has discussed a new drilling campaign for 2024, but it will likely require a new or modified license from the US Treasury Department's sanctions enforcement arm to bring in equipment needed for that, a company source has said.

Venezuela's largest foreign asset, US refiner Citgo, is going to be auctioned next year to pay for billions of dollars in debt claims advanced against Caracas and PdV.

By Haik Gugarats

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