The Biden administration on Wednesday significantly rolled back sanctions on Venezuela's oil industry as part of the U.S. response to a deal between Venezuela's government and opposition for the 2024 election.
A new Treasury Department license authorizes Venezuela to freely produce and export oil for six months without restrictions. This represents the most substantial easing of Trump-era sanctions on Caracas since 2019.
The U.S. moves follow months of negotiations pressing Caracas to take concrete steps toward democratic elections in exchange for lifting some sanctions. It signals increased Biden administration engagement with Venezuela on energy and other issues.
However, Secretary of State Antony Blinken said Venezuela has until late November to meet further conditions, including lifting bans on opposition candidates. Failure to comply could prompt reimposed sanctions, officials warned.
The sanctions relief allows Venezuela to rebuild oil sales with any global customers or markets. It also removes secondary trading bans on Venezuelan sovereign bonds and state oil company PDVSA securities.
But primary restrictions remain on Venezuela's bond market, and limitations continue on numerous individuals connected to the Maduro government.
On Tuesday, Venezuela's government and opposition reached a deal on electoral guarantees for a 2024 vote. But outstanding opposition demands remain regarding barred candidates.
Talks are set to continue. But sanctions relaxations could incentivize democratic reforms sought by the U.S.
Venezuela's economy and oil output have been crippled for years. Quick export gains seem unlikely without major infrastructure investment. Still, eased sanctions open doors for energy firms to reconsider operations there.
The moves illustrate the complex balancing act as the U.S. calibrates pressure tactics and diplomatic outreach.