Exclusive: The United States eases oil sanctions on Venezuela after the election agreement – official

Venezuelan President Nicolas Maduro speaks during a meeting with Iranian President Ebrahim Raisi at Miraflores Palace in Caracas, Venezuela on June 12, 2023. REUTERS/Leonardo Fernandez Viloria/File photo Obtaining licensing rights

WASHINGTON, Oct 18 (Reuters) – The Biden administration will ease sanctions on Venezuela’s oil and gas sector almost immediately in response to the 2024 election deal reached between the Venezuelan government and the country’s opposition, a senior U.S. State Department official told Reuters on Wednesday.

The official, who spoke on condition of anonymity, said the United States was moving forward with broad sanctions relief on the OPEC member state. However, the United States has threatened to reverse these steps unless the government of President Nicolas Maduro goes further and agrees to lift the ban on opposition presidential candidates and release political prisoners.

The American moves come after months of negotiations in which Washington pressured Caracas to take concrete measures toward holding democratic elections in exchange for lifting some – but not all – of the strict sanctions imposed during the era of former US President Donald Trump.

As a result of concessions made by Maduro to the U.S.-backed opposition, the administration of President Joe Biden is issuing licenses and authorizations that will include allowing Venezuela to resume long-suspended trade with Caribbean countries, the official said.

It marks a significant step in the Biden administration’s increased engagement with Maduro on issues ranging from energy to immigration, moving away from Trump’s “maximum pressure” campaign against the socialist-ruled country.

Maduro’s government and the opposition reached an agreement in Barbados on Tuesday on electoral guarantees to hold international observer elections in the second half of 2024.

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But the agreement did not lift the ban on opposition candidates barred by the government from holding public office, nor did it mention the release of political prisoners, which was less than what the United States wanted to see.

The official said that the United States welcomes the electoral agreement but considers it “a partial agreement toward an electoral roadmap,” adding that the United States is ready to take more steps regarding Venezuela’s vital energy sector. “Today, tomorrow, it will happen quickly.”

However, the official warned that US decisions on easing sanctions will depend on Maduro complying with the latest agreement and working toward free and fair elections.

“We are ready to take specific actions, but if they fail to meet their commitments, we can certainly withdraw those positive incentives,” the official said.

The official also expressed optimism that the operation would lead to the release “relatively soon” of Americans imprisoned in Venezuela who the United States designates as unjustly detained.

The Venezuelan government did not immediately respond to a request for comment.

The United States imposed harsh sanctions on Venezuela to punish Maduro’s government after his re-election in 2018, which the United States and other Western governments rejected as a sham. Since 2019, US sanctions have prevented state oil company PDVSA from exporting to selected markets.

Agreement in Barbados

The State Department official provided few details about what the easing of sanctions would entail but made clear that it would not mean a complete lifting of punitive measures.

The package under consideration included resuming gas exports to the Caribbean; expanding Venezuela’s licenses for U.S. oil services companies and other foreign oil service companies, fuel providers, and contractors; It allowed at least one additional foreign oil company to ship Venezuelan crude to pay off debts, according to a source close to the negotiations.

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The United States is seeking ways to boost global flows of oil to mitigate rising prices resulting from sanctions imposed on Russia and OPEC+ decisions to reduce production. But experts say that the chances of Venezuela’s exports compensating for these cuts are slim in the absence of a significant increase in investment in the country’s damaged oil sector.

Talks between the government and the opposition, aimed at providing a way out of Venezuela’s ongoing political and economic crisis, were held on Tuesday for the first time in nearly a year. They agreed to hold further meetings at an unspecified date.

The agreement they announced stipulates that each side can choose its 2024 candidate according to its own internal rules, but it does not remove the ban on some opposition figures – including Maria Corina Machado, the front-runner in the October 22 primary – that prevents them from taking office.

Opposition sources said that they have not given up trying to lift this ban.

Reporting by Matt Spitalnick; Additional reporting by Mariana Parraja and Myla Armas; Editing by Josie Cow and Lisa Shoemaker

Our standards: Thomson Reuters Trust Principles.

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