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Reimposing Sanctions on Venezuela’s Oil Industry: Biden Administration

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The Biden administration announced on Friday its intention to reimpose sanctions on Venezuela’s oil industry unless President Nicolas Maduro fulfills agreements that allow for free and fair elections later this year.

Revoking Licenses and Addressing Election Interference

This decision follows the administration’s revocation of a previously issued license that permitted transactions involving Venezuela’s state-owned gold mining company. The move was made due to President Maduro’s attempts to suppress competition in the upcoming election.

In an official document released by the Treasury Department, it was stated that Maduro’s actions, such as arresting opposition members and preventing them from running for office, contradict the October agreements regarding the election. These agreements were the basis for the easing of sanctions.

Upheld Decision Against Opposition Candidate

Just recently, the Venezuelan Supreme Court upheld a ruling that disqualified opposition candidate Maria Corina Machado from the presidential election.

According to the Treasury Department, unless there is significant progress between Maduro, his representatives, and the opposition Unitary Platform concerning the inclusion of all presidential candidates in this year’s election, the United States will not renew a license that permits transactions involving Venezuela’s oil and gas industries. This license is set to expire on April 18.

Balancing Pressure and Energy Prices

The administration finds itself walking a fine line as it seeks to pressure Maduro without negatively impacting energy prices leading up to the U.S. presidential election later this year.

Biden’s Approach to Venezuelan Supreme Court Ruling

In a recent assessment of the Venezuelan Supreme Court ruling, Clearview Energy Partners suggests that President Biden may be cautious about increasing crude oil prices during an election year, especially considering the escalating supply risks in the Middle East.

Clearview Energy Partners speculates that by delaying action on petroleum sanctions until April, the Biden administration maintains flexibility while exerting pressure on President Maduro to comply with the October agreement.

Furthermore, in mid-April, the existing safeguards protecting Venezuela’s state-owned oil company, Citgo, from its creditors will expire, further intensifying the pressure on Maduro’s regime.

Currently, there is an ongoing auction in a U.S. court to settle Venezuela’s outstanding debts. While the Biden administration has expressed support for a negotiated settlement, it is also open to allowing the sale of Citgo’s parent company after the auction concludes in July.

Reporting by Steve Cronin; Editing by Michael Kelly

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