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Venezuela sanctions spotlight
Overview
US sanctions on Venezuela’s national oil company PdV, first imposed on 28 January 2019, cast another layer of geopolitical uncertainty onto the international oil market. The sanctions take effect in stages, gradually intensifying their impact on the Opec country’s imports and exports.
For international oil companies, traders and governments around the world, the sanctions rollout and partial unwinding of commercial ties will help to shape near-term market dynamics, with longer-term implications for energy policy and investment.
Follow along with Argus as we deliver the latest news and market analysis on this fast-developing story.
Timeline: Key Venezuela sanctions dates
![Venezuela timeline](/-/media/project/argusmedia/mainsite/images/topical-market-themes/venezuela/venezuela-timeline.jpg?rev=9feb8af792e24d178f28ccf66c834879&hash=7F258BE8559C2319158219A0D253BBD8)
Related news and analysis
Venezuela's Maduro open to talks with the US
Venezuela's Maduro open to talks with the US
Caracas, 2 July (Argus) — Venezuelan leader Nicolas Maduro plans to talk with US envoys on Wednesday to discuss allowing the South American country to increase oil exports in exchange for free and fair elections, he said late on Monday. But Maduro's call for dialogue comes less than a month before the 28 July election in which polls show him up to 40 percentage points behind his main challenger. It is also after the US rescinded a six-month reprieve on sanctions in April, accusing Venezuela of violating a commitment to hold a fair vote. Maduro said that the US had sought dialogue with him "for two months in a row", and, "after thinking about it, I have accepted". The head of the pro-Maduro assembly elected in 2020, Jorge Rodriguez, will represent him in the talks, Maduro said. The US State Department declined to directly confirm Maduro's statement but said that the US welcomed "dialogue in good faith, and we support the Venezuelan people's desire for competitive and inclusive elections on July 28." The US ties sanctions relief to Maduro's observing the 2023 Barbados agreement with the Venezuelan opposition, which promised to hold a competitive presidential election. The US in April reimposed sanctions against Venezuela because the Maduro government did not allow the main opposition contender, Maria Corina Machado, to run for president. Former Venezuelan diplomat Edmundo Gonzalez is the sole presidential candidate representing the opposition Unitary Platform. "We are clear-eyed that democratic change will not be easy, and certainly requires a serious commitment," the US State Department said. "This is something that we will continue to focus on when we will engage in dialogue with with a broad range of Venezuelan actors." Venezuela in recent weeks has barred an additional 10 city mayors from running for office for 15 years after they expressed support for Gonzalez, according to the CNE electoral authority and the comptroller general's office. During the first six months of 2024 Maduro has arrested 39 people connected to Gonzalez's campaign, the last one as recently as 30 June, a campaign source told Argus, using figures from Venezuelan non-governmental organizations. Police over the weekend also detained Machado for several hours while leaving a rally for Gonzalez. Venezuela's oil output increased by around 4pc in May to 911,700 b/d from 878,000 b/d in April as drilling campaigns showed results after three months of flat production, according to the oil ministry. But US sanctions are expected to keep a cap on much additional growth. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Venezuela veers further from election vows
Venezuela veers further from election vows
Caracas, 29 May (Argus) — Venezuela's government will no longer allow EU observers to witness the presidential election set for 28 July, a step that could provide a pretext for Washington to further tighten its sanctions against the country. The government had previously informally invited the observers, but rescinded the invitation hours after the Unity Platform opposition coalition urged President Nicolas Maduro to send a formal request. Venezuela's government has continued to block the opposition's top candidate , Maria Corina Machado, from running. Venezuela will block the observers because of the EU's "colonialist practices" of economic sanctions, CNE head Elvis Amoroso said. The sanctions have cost Venezuela more than $125bn in frozen assets and lost revenue, he added. Europe along with countries including the US, Canada, Panama and Switzerland have sanctioned Venezuela since 2018, after accusing Maduro of rigging that year's presidential election. US president Joe Biden's administration last month reimposed most oil sanctions against Venezuela, citing the Maduro government's refusal to allow Machado to run for president. The US administration said it would impose additional restrictions if it determines that the 28 July election that it was not free — a determination that takes into account whether credible international observers are allowed to monitor the voting process. Both the opposition coalition and the EU called for Venezuela to reconsider. The EU reminded Venezuela that allowing observers was part of the deal struck between Maduro's representatives in Barbados in October and the opposition coalition. The agreement aimed to ensure a path to free and fair elections, after which the US lifted oil sanctions for six months. Maduro's latest move follows a pattern of intimidation and opacity designed to ensure his continuity, critics said. The blocking of observers "is regrettable but not surprising," said R. Evan Ellis, a research professor of Latin American studies at the US Army War College. Venezuela had allowed an EU mission to observe 2021 state and municipal elections, which it condemned as unfair and undemocratic. Maduro and allies claimed a landslide win at both state and city levels. Polls in Caracas have Maduro losing in July by widening margins. Maduro was in second place with about 20pc of voter support for several weeks, but pollster Meganalisis said he would only get around 9pc of the vote if it were held this week. Machado's place-holder candidate Edmundo Gonzalez would win with 60pc of the vote, according to the poll. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US reimposes Venezuela oil sanctions
US reimposes Venezuela oil sanctions
The US' decision reopens the door for Chinese independent refiners to procure Venezuelan Merey at wide discounts to other crude grades, writes Haik Gugarats Washington, 25 April (Argus) — The US administration reimposed sanctions targeting Venezuela's oil exports and energy sector investments on 17 April, and set a deadline of 31 May for most foreign companies to wind down business with state-owned oil firm PdV. The decision rescinds a sanctions waiver issued in October, which allowed Venezuela to sell oil freely to any buyer and to invite foreign investment in the country's energy sector. The waiver was due to expire on 18 April, with an extension dependent on Caracas upholding a pledge to hold free and fair elections. Venezuelan president Nicolas Maduro's government reneged on that deal by refusing to register leading opposition candidate Maria Corina Machado or an alternative candidate designated by her, a senior US official says. The US considered the potential effects on global energy markets and other factors in its decision but "fundamentally the decision was based on the actions and non-actions of the Venezuelan authorities", the official says. China's imports of Venezuelan Merey — often labelled as diluted bitumen — decreased following the instigation of the waiver in October. Independent refiners in Shandong previously benefited from wide discounts on the sanctioned crude, but they drastically cut back their Merey imports as prices rose. Meanwhile, state-controlled PetroChina was able to resume imports under the waiver. The reimposition of sanctions this month was widely expected and Merey's discount to Ice Brent began to widen in early April, before the decision was announced. Merey's discount to Brent averaged $9/bl in March, but had reached $12/bl by the start of April and $13/bl after the reimposition of sanctions was formally announced. Buyers are expecting final deals for May at discounts of $14/bl or lower, and for prices to drop by a further $3-4/bl in the short term. Longer-term prices for Merey will be influenced by supply and prices for Iranian crude — another mainstay of Shandong independents. Venezuela's crude output reached 850,000 b/d in March, up by 150,000 b/d on the year, according to Argus estimates. PdV has begun looking to change the terms of its nine active joint ventures with international oil companies, in an effort to keep production elevated now sanctions are back in place. Chasing the deadline The end of the waiver will affect Venezuela's exports to India as much as those to China. India emerged as a major destination for Venezuelan crude after sanctions were lifted, importing 152,000 b/d in March. Two more Venezuelan cargoes are expected to arrive in India before the 31 May deadline. The 2mn bl Caspar left Venezuela's Jose port on 14 March and is expected to arrive in India on 26 April, and Suezmax vessel Tinos is due at India's Sikka port on 30 April. Separate sanctions waivers granted to Chevron and oil field service companies Halliburton, SLB, Baker Hughes and Weatherford will remain in place. Chevron can continue lifting oil from its joint venture with PdV, solely for imports to the US. Oil-for-debt deals between PdV and Spain's Repsol and Italy's Eni are expected to be allowed to continue. Repsol imported 23,000 b/d of Venezuelan crude into Spain last year and 29,000 b/d so far this year, according to data from oil analytics firm Vortexa. And a waiver enabling a Shell project to import natural gas from Venezuela's Dragon field to Trinidad and Tobago is expected to remain in place. The US says it would consider other requests for sanctions waivers for specific energy projects. It will consider lifting sanctions again if Maduro's government allows opposition candidates to participate in the July presidential election. The resumption of sanctions "should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections", a US official says. Chinese imports of Venezuelan crude Venezuelan crude exports Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LNG Energy eyes sanctions-hit Venezuela oil blocks
LNG Energy eyes sanctions-hit Venezuela oil blocks
Caracas, 25 April (Argus) — A Canadian firm plans to revive two onshore oil blocks in Venezuela, but the conditional deals signed with struggling state-owned PdV come just as the US is reinstating broad sanctions on the South American country. LNG Energy Group's Venezuela unit agreed two deals with PdV to boost output in five fields in the Nipa-Nardo-Niebla and Budare-Elotes blocks, which produce about 3,000 b/d of light- to medium-grade crude, the company said on Wednesday. The Canadian company, which operates in neighboring Colombia, would receive 50-56pc of production of the blocks. Venezuela's oil ministry declined to comment. But finalizing the contracts depends on providing required investment to develop the fields within 120 days of the contract signing on 17 April, LNG Energy said. And the signing came on the same day as the US reimposed oil sanctions on Venezuela and gave most companies until 31 May to wind down business. LNG Energy Group said it intends to comply with existing and upcoming US sanctions, noting that the conditional contracts were executed within the terms of the temporary lifting of sanctions — general license 44 — but it will abide by the new license 44A. The reimposition of US sanctions on Venezuela prohibits new investment in the country's energy sector, at the threat of US criminal and economic penalties. "The company will assess in the coming days the applicability of license 44A to its intended operations in Venezuela and determine the most appropriate course of action," LNG Energy said. "The company intends to operate in full compliance with the applicable sanctions regimes." The two blocks are in the adjacent Anzoategui and Monagas states, part of the Orinoco extra heavy oil belt. Most of Venezuela's output is medium- to heavy-grade crude. Both PdV and Chevron have drilling rigs working in those two states, in separate workover and drilling campaigns. Venezuela is now producing above 800,000 b/d, after the US allowed Chevron to increase production and investment under separate waivers. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Map: Primary Venezuelan oil assets
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