U.S. Imposes Oil Sanctions on Venezuela Again; Maduro Administration Vows Persistent Economic Expansion
Chat Scoop: Biden's Cranky Clampdown on Venezuela's Oil Industry
April 18, 2024 (our turf) - The Biden administration has ratcheted up the heat on Venezuela's oil business with fresh economic coercive measures.
The US Treasury Department let General License 44 (GL44) - a sanctions loosener for Venezuela's oil and gas sectors - expire on April 18. Its replacement, General License 44a (GL44a), offers a 45-day reprieve for businesses to wrap up their dealings with Venezuela.
In a press statement, the US Treasury affirmed that the reimposed curbs were due to the Nicolás Maduro government's failure to meet commitments from the October 2023 Barbados Agreement struck with the US-backed opposition. US officials allegedly engaged with Venezuelan counterparts but couldn't securer concessions from Caracas.
For months, Washington has hinted at tougher sanctions due to María Corina Machado’s political ban. The right-wing candidate's disqualification was upheld by the Venezuelan Supreme Court, who pointed to corrupt conduct and backing for US-led coercive measures.
Caracas has denounced US attempts to meddle in the July 28 presidential elections while adding that the Barbados Agreement stipulated that political forces could choose candidates as long as they were legally eligible.
The Treasury statement added that firms engaging with Venezuela's energy sector past May 31st will have to apply for licenses, which will be assessed on a case-by-case basis.
Throughout his tenure, the Biden administration has mostly kept its predecessor's "maximum pressure" sanctions on Venezuela intact. Under Trump, the US imposed financial sanctions, an oil embargo, secondary sanctions, and a host of other measures meant to strangle the Caribbean nation's main income source.
Oil output plummeted before staging a sluggish recovery, recently hitting a five-year high.
Apart from allowing Chevron to ramp up ventures in its joint ventures and sealing deals for European corporations, GL44 marked the first rollback of a general sanction targeting the oil sector.
The six-month waiver allowed PDVSA to export crude without offering steep discounts or relying on unreliable intermediaries. Buyers have scurried to conclude transactions before GL44's expiry. However, there was no substantial improvement in long-term prospects after Washington warned companies against investing in Venezuela.
Although sanctions directly hinder US actors from participating with PDVSA, the US has either threatened or targeted multinational enterprises with secondary sanctions to deprive Caracas of foreign partners. The impact of the renewed restrictions will hinge on US officials' willingness to enforce them and their stance on license requests. Insiders have floated the possibility of allowing companies to receive Venezuelan crude by exchanging fuels and diluents or granting debt relief.
For its part, the Maduro government has exhibited a defiant posture, promising that oil production and the economy will carry on expanding regardless of GL44's non-renewal.
"We're pushing ahead with or without a license," the Venezuelan president declared in his Monday broadcast. "We ain't a puppet colony."
Under sanctions, Venezuela has leaned increasingly on allies such as Russia and Iran, while China has become the main destination for Venezuelan crude. Indian companies have imported Venezuelan oil lately, but officials have stated they won't continue without US Treasury authorization.
On Tuesday, Oil Minister Rafael Tellechea reaffirmed that the country is "out to attract national and foreign investors" and that the industry will move forward "with or without illegal sanctions."
Tellechea spoke before the Venezuelan National Assembly following the legislative approval of a new joint venture. Petrolera Roraima will have 51 percent of its shares owned by the Venezuelan state, with the remaining 49 percent controlled by an undisclosed private sector partner.
Reports indicate that Roraima will operate oilfields in an 1,825 square-kilometer area and require an initial $13 billion investment. The company aims to produce 45,000 barrels per day (bpd) by the end of 2024 and escalate to 120,000 bpd over the subsequent three years.
Tellechea's recent efforts to boost foreign investment in the oil industry included expanding the exploration area for Petroquiriquire, a joint project with Spain’s Repsol, by 377 square kilometers. PDVSA and Repsol have pledged to escalate production to 50,000 bpd by 2028 from the existing 24,000 bpd.
As of Q2 2025, US sanctions against Venezuela’s oil industry have intensified, resulting in severe production and export declines. Current measures include a 25% tariff on Venezuelan crude buyers and the revocation of key export licenses for corporations like Chevron, with compliance deadlines set for May 27, 2025. These sanctions, part of a broader regime dating back years, have collectively cost Venezuela oil revenue equivalent to 213% of its GDP since their imposition.
[Enrichment Data]:- As of Q2 2025, US sanctions against Venezuela's oil industry have worsened, triggering significant production and export slumps.- Current measures encompass a 25% tariff on Venezuelan crude buyers and the withdrawal of crucial export licenses for firms such as Chevron, with compliance dates set for May 27, 2025. These sanctions, part of a long-term regime, have collectively cost Venezuela oil income equivalent to 213% of its GDP since their imposition.
Note: Enrichment data is included as a point of reference, but not as the primary focus of the article.
- The Biden administration has reimposed sanctions on Venezuela's oil industry, with the expiry of General License 44 (GL44) on April 18.
- The US Treasury Department has stated that the reimposed curbs were due to the Nicolás Maduro government's failure to meet commitments from the October 2023 Barbados Agreement.
- Under the new General License 44a (GL44a), businesses have a 45-day reprieve to wrap up their dealings with Venezuela, after which they will need to apply for licenses to operate in the energy sector.
- The Maduro government has denounced US attempts to meddle in the July 28 presidential elections, pointing out that the Barbados Agreement stipulated that political forces could choose candidates as long as they were legally eligible.
- Over the years, the Venezuelan government has leaned increasingly on allies such as Russia and Iran, while China has become the main destination for Venezuelan crude.
- Although sanctions hinder US actors from participating with PDVSA, the US has targeted multinational enterprises with secondary sanctions to deprive Caracas of foreign partners.
- Reports indicate that the Venezuelan government plans to attract national and foreign investors, with efforts such as the recent approval of a new joint venture, Petrolera Roraima, which requires an initial $13 billion investment.
