Biden administration reinstates oil sanctions on Venezuela following election violations

Biden administration officials announced Wednesday that they will reimpose punishing sanctions on Venezuela’s oil and gas sector, saying that the Maduro regime failed to uphold its commitments to hold free and fair elections.

The Treasury Department had issued a six-month sanctions reprieve for Venezuela’s oil and gas sector last October. The authorization allowed the country’s state-run oil and gas companies to produce and export its supplies for six months, so long as Venezuelan President Nicolas Maduro’s government followed through on its pledge to hold “free and fair elections” and allow participation from opposition parties.

Biden administration officials said Wednesday that Maduro’s regime had failed to uphold its end of the agreement, thus ending the sanctions reprieve, known as a General License 44, at its six-month expiration date.

The officials added that Venezuela would be given 45 days to slowly halt its oil and gas activities, a ramp-down meant to avoid adding volatility and price pressure to global markets.

After that period, U.S. policy and sanctions on Venezuela’s oil sector will return largely to what they were prior to October 2023, officials said.

“After a careful review of the current situation in Venezuela, the United States determined Nicolas Maduro and his representatives have not fully met the commitments made under the electoral roadmap agreement,” State Department officials said in a statement Wednesday announcing the reimposition of sanctions.

Department officials said they are “concerned that Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society.”

In the last six months, Maduro has taken steps to publicly block opposition candidates from taking place in Venezuelan elections — including banning the main opposition candidate, Mariá Corina Machado, from the ballot completely.

He has also arrested members of her staff and obstructed Venezuelan emigrants from voting in elections.

The resumption of sanctions could be crippling for Venezuela’s oil sector, which has struggled under years of sanctions from the U.S., as well as years of underinvestment and mismanagement, according to the U.S. Energy Information Administration.

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Despite being home to the world’s largest crude reserves, Venezuela was producing just 780,000 barrels of oil per day last October, when the U.S. announced the six-month reprieve. At the time, it also had just one active oil rig in operation, a drastic decline from the more than 80 units that were operational in 2014, according to data from Baker Hughes.

Maduro said publicly this week that he is “willing to negotiate” with the Biden administration, saying in a press conference earlier this week: “I will never close the door to dialogue with anybody.”