US in 'no rush' to lift sanctions on Venezuela

  • : Crude oil
  • 21/03/08

President Joe Biden's administration has no immediate plans to relax the sanctions pressure against Venezuela's oil sector, despite doubts about its effectiveness and humanitarian drawbacks.

"There is no rush to lift sanctions," a senior administration official told reporters today. "The US is going to continue to increase the pressure, and it is going to expand that pressure multilaterally" until such time that Venezuelan president Nicolas Maduro's government negotiates in good faith with its opponents and agrees to hold free and fair elections, the US official said.

Biden's administration today made good on his campaign pledge of granting temporary asylum status to more than 300,000 Venezuelans living in the US — a small part of the more than 5mn refugees who left the country over the past decade because of deteriorating economic and social conditions.

Biden has criticized his predecessor's policy of unilateral sanctions against Caracas as ineffective, and his top officials say that the criticism is still valid. But changing that policy has proved difficult because it could require Washington to abandon its recognition of Venezuelan opposition leader Juan Guaido as the country's interim leader — a bridge too far for a US administration that has promised to make the promotion of human rights and democracy a top priority.

The net result is that US officials make a good case for altering the sanctions regime but not until a credible dialogue between Maduro and the Guaido-led opposition succeeds in ensuring new elections in Venezuela.

In Washington, senior Democratic members of the House of Representatives have called on the White House to ensure that sanctions do not interfere with the provision of humanitarian assistance to Venezuela. The oil industry separately is pushing for restoring crude-for-diesel swaps for non-US companies, making the case that it would ensure fuel supply for food and aid distribution and power generation.

"The focus of sanctions should be to increase pressure on the (Maduro) regime, eliminate any sort of access to corrupt capital to sustain themselves but also not one that penalizes unnecessarily the Venezuelan people," the US official said.

"The only outcome of this crisis is a negotiation that leads to a democratic solution," the official said.

Maduro in the past has used negotiations with the opposition as a delaying tactic, so the US will need to be persuaded that future talks are in earnest, according to the official. "Once that happens, we will consult with the international community and the (Guaido) interim government and make decisions about whether sanctions would be lifted."

Venezuela's crude production has recovered to around 500,000 b/d, but that is still less than half pre-US sanctions levels. While the financial and oil sanctions imposed by Washington have accelerated the decline in the Opec producer's output, decades of mismanagement and the departure of trained professionals from state-owned PdV are the root causes of the drop.

The US is looking for new ways to pressure the Maduro government, since Caracas appears to have adapted to the oil sanctions, the US official said. "We have clearly seen is that the regime has adapted to sanctions, oil markets long ago have adapted to oil sanctions, and that they are able to sustain themselves through illicit flows."

The US has vowed to coordinate its Venezuela policy more closely with the EU and countries in the western hemisphere. But the US is almost alone now in continuing to recognize Guaido and the defunct legislature he heads as the country's sole legitimate authority. The EU has called on the opposition to make "difficult compromises" in joining negotiations with Maduro.

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