The Biden administration will reimpose sanctions on Venezuela's oil and gas sectors due to non-compliance with the Barbados Agreement's electoral conditions.
The Biden administration announced on April 17 that it would not renew a general license that temporarily lifted sanctions on Venezuela's oil and gas sector. Officials cited the Venezuelan government's failure to meet the conditions of the Barbados Agreement, which was intended to ensure free and fair elections in the country.
According to senior administration officials, the Nicolás Maduro regime did not fulfill key aspects of the agreement signed in October 2023, specifically regarding the electoral process. Consequently, the U.S. Department of the Treasury is set to issue a new general license providing a 45-day "wind down" period for businesses to conclude their existing transactions with Venezuelan oil and gas operations.
"Over the past several months... we’ve completed a very careful review, and we’ve determined that although the Venezuelan authorities have met some key commitments, they’ve also fallen short in several areas," stated a senior official of the Biden administration. The official highlighted issues such as the disqualification of candidates and ongoing repression against opposition figures.
Matthew Miller, U.S. Department of State spokesman, confirmed that General License 44 would expire at 12:01 a.m. on April 18. Miller reiterated the call for Venezuela to release all political prisoners and permit all candidates to participate in the upcoming elections. "We will continue to support Venezuelans’ aspirations for a more democratic, stable, and prosperous Venezuela," Miller added.
The Biden administration had relaxed sanctions against Venezuela in October 2023, following an agreement between the Maduro government and the opposition. The agreement was described by Brian Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, as a significant step towards resolving Venezuela's crises.
However, with the recent developments, Secretary of State Antony Blinken emphasized that the U.S. would take action if the conditions of the electoral roadmap were not met, including the release of political prisoners.
Companies seeking to continue oil and gas-related activities with Venezuela can apply for specific licenses on a case-by-case basis through the Office of Foreign Assets Control. A senior official mentioned that the review of such licenses would consider the U.S.'s national security and foreign policy interests.
The move to end the general license coincides with President Biden's broader efforts to scale back domestic oil production, which has been met with criticism by some U.S. senators. In the lead-up to the decision, a group of senators, led by Sen. Dan Sullivan (R-Alaska), sent a letter to President Biden urging him not to renew the general license, citing the Maduro regime's failure to honor the Barbados Agreement.
The impact of the termination of the general license on global oil prices and immigration from Venezuela to the U.S. remains uncertain, as administration officials declined to speculate on these matters. The current state of the event leaves a 45-day window for businesses to wrap up their transactions with the Venezuelan oil and gas sector.
