The Treasury Department announced Oct. 18 that the Biden administration will temporarily suspend sanctions on exports of Venezuelan oil and investments in the country’s oil and gas sector now that progress has been announced on negotiations for political reform in Venezuela.
Treasury said it “issued a 6-month general license temporarily authorizing transactions involving the oil and gas sector in Venezuela. The license will be renewed only if Venezuela meets its commitments under the electoral roadmap as well as other commitments with respect to those who are wrongfully detained.”
The suspension will stay in place until 12:01 a.m. Apr. 18, eastern daylight time. It will apply to:
- Production, lifting, sale, and exportation of oil or gas from Venezuela, and provision of related goods and services.
- Payment of invoices for goods or services related to oil or gas sector operations in Venezuela.
- New investment in oil or gas sector operations in Venezuela.
- Delivery of oil and gas from Venezuela to creditors of the government of Venezuela, including creditors of state-owned oil and gas company Petroleos de Venezuela SA entities for the purpose of debt repayment.
Venezuela exports crude oil and refined products but not natural gas. However, it does have substantial domestic sales of natural gas that could be affected by the suspension of barriers to production and related goods and services.
The US government has described the 2018 presidential election of Nicolas Maduro and the 2020 National Assembly elections as essentially fraudulent. Most opposition parties boycotted both election cycles. The question now is whether the Maduro administration and united opposition parties can agree on reforms to allow fair elections in 2024.
Foreign vs. domestic policy
To some lawmakers in the US, President Biden’s energy policy has the wrong priorities. The administration is allowing more oil from Venezuela while hindering domestic oil production.
“On the heels of announcing the smallest 5-year offshore oil and gas leasing plan in decades for the United States, this administration is turning to Venezuela,” said Sen. Joe Manchin (D-W.Va.), during an Oct. 19 hearing.
“They’re one of the world’s dirtiest energy producers and an oppressor of its own people,” Manchin said, yet Biden officials want to allow more Venezuelan oil exports “to help make up the production that they refuse to allow in America.”
At the same hearing, Sen. John Barrasso (R-Wyo.) connected policies on oil and critical minerals together and argued that Biden policies are misguided on both.
“President Biden’s ‘energy transition’ obsession is going to move us from energy independence to energy and mineral dependence on China and Russia and OPEC,” Barrasso said. “That’s not the kind of ‘transition’ Americans want or need.”
Sen. Lisa Murkowski (R-Alas.) was especially angered to hear of the Venezuela sanctions suspension after a string of recent policy decisions restricting oil and gas work in Alaska. The Interior Department Sept. 6 revoked oil and gas leases issued for tracts on the coastal plain of the Arctic National Wildlife Refuge and reduced the acreage available for leasing in the National Petroleum Reserve-Alaska (OGJ Online, Sept. 7, 2023). Then Interior chose to leave Alaska’s Cook Inlet out of the next 5-year offshore oil and gas program (OGJ Online, Sept. 29).
The Biden administration is “looking in all the wrong places for energy” and “easing up on the worst regimes in the world,” Murkowski wrote in a Facebook post Oct. 18.
“And that’s exactly backwards. Alaska could be responsibly producing the resources the world needs, but the administration has decided we are the problem. This is beyond absurd,” she wrote. “President Biden: the sanctions go on countries like Iran, Russia, and Venezuela—not Alaska.”