US holds off on Venezuela sanctions snapback

The US today welcomed Venezuela's decision to open a pathway for opposition candidates to run in the country's presidential election, signaling no imminent action to snap back oil sanctions lifted six weeks ago.

But the US continues to insist that Caracas must release more political prisoners and US citizens held in Venezuela, as a condition for continuing to pause restrictions on Venezuelan oil exports.

"We're prepared to take action in the coming days to pause certain sanctions relief, unless progress is made" on the issue of prisoners, the White House said.

President Joe Biden's administration set a 30 November deadline for Caracas to release three US citizens held in detention in Venezuela and to lift restrictions that prevent key opposition leaders from running in next year's presidential elections — threatening to reimpose some sanctions against the country's oil sector.

Venezuela's government last night partially responded to the US demands, opening a path for its political opposition to run in the 2024 presidential election only hours before the US deadline was set to expire. Mediator Norway announced late Thursday that candidates banned from running by Venezuelan president Nicolas Maduro's government can appeal their disenfranchisement before the country's supreme court.

"We certainly welcome yesterday's announcement by Maduro's representatives and the Unitary Platform, which defines the timeline and process for an expedited reinstatement of all candidates," the White House said. "We are, however, deeply concerned about the lack of progress on the release of wrongfully detained US citizens and Venezuelan political prisoners."

Maduro's concession is minimal and it remains to be seen if it will make a meaningful difference for the opposition.

The court is filled with Maduro-aligned justices, international observers including Human Rights Watch have said. And candidates will have to show that they have never made disparaging comments about Maduro or other administration authorities and are committed to the defense of Venezuelan territory. The last requirement comes ahead of a referendum in Venezuela on Sunday for citizens to decide if the country should pursue its long-standing dispute over territory in oil-rich Guyana.

The US supports a peaceful resolution to the territorial dispute between Guyana and Venezuela, the White House said. The current border "should be respected unless the parties reach a new agreement or the International Court of Justice decides otherwise," it said.

The court today warned Venezuela that it should take no action to seize Guyana's resource-rich Essequibo province, regardless of the outcome of a 3 December referendum on the status of the disputed territory.

Venezuela's glacial pace of implementing US terms and the bid to annex part of neighboring Guyana's territory do not inspire confidence that US sanctions relief will be permanent. The sanctions waiver, issued on 18 October, was meant to last until 18 April 2024, with a promise of extension if the Maduro government made good on its agreement with the opposition to allow a truly competitive presidential and parliamentary elections by the end of 2024.

The White House has already warned US and foreign companies not to get their hopes up about possible return to Venezuela. The sanctions waiver should not be seen as encouragement to resume full operations in that country, US sanctions enforcers said last month, noting that oil companies can choose to have a more limited footprint.

In the best-case scenario of continued sanctions relief, Venezuela could be among the few Opec members definitely slated to grow output next year, albeit by 200,000 b/d, from 800,000 b/d at present. In practice, foreign producers that already had separate waivers to maintain limited operations in Venezuela, including Chevron, Italy's Eni and Spain's Repsol, would have been best positioned to take advantage of the thaw in US-Venezuela relations.

By Haik Gugarats