Unlock Editor’s Digest for free
Roula Khalaf, editor of the FT, picks her favorite stories in this weekly newsletter.
The United States is partially lifting sanctions on Venezuela after talks resumed between the South American country’s socialist government and a U.S.-backed opposition faction.
The U.S. Treasury Department on Wednesday evening issued a six-month license to approve transactions in Venezuela’s oil and gas sector, as well as a separate license to do business with national gold miner Minerven.
The Treasury Department also amended two existing licenses to lift a ban on secondary trading in certain Venezuelan bonds and debt of state oil company Petróleos de Venezuela (PDVSA), but a ban on primary trading remains in effect.
The announcement of sanctions relief comes a day after the Maduro government and the Unitarian Platform – a US-backed opposition faction – resumed political talks in Barbados. They agreed to hold a presidential election in the second half of next year.
“In response to these democratic developments, the U.S. Treasury Department has issued general licenses authorizing transactions in Venezuela’s oil and gas and gold sectors and lifting the ban on secondary trading,” the Treasury Department said in a statement.
The Venezuelan government and opposition also agreed to allow international observers to enter Venezuela for the election.
They also agreed that all qualified candidates can take part in the election and that each side can select its candidate according to its own rules.
The opposition will hold its primaries on Sunday, despite leading candidate María Corina Machado being banned from holding office in June because of her support for US sanctions and Juan Guaidó’s US-backed parallel presidency in 2019.
U.S. Secretary of State Antony Blinken said Wednesday evening that Washington expects the Venezuelan government to begin releasing political prisoners and wrongfully imprisoned U.S. citizens and lifting bans on all candidates by the end of November.
“Failure to comply with the terms of this agreement will result in the United States reversing the actions we have taken,” he said.
“We believe this roadmap is the most viable path for the Venezuelan people to reach a lasting agreement that leads to competitive elections, the restoration of democratic order and an end to the humanitarian crisis in Venezuela,” a U.S. official said earlier Wednesday .
The official added that the U.S. “retains the authority to modify or revoke any authorizations.” [Nicolás] Maduro and his representatives are not fulfilling their obligations.”
Maduro, who is widely expected to run in the election, assumed the presidency in 2013 after the death of Hugo Chávez, the father of the so-called Bolivarian Revolution, which promoted heavy public spending backed by the country’s oil wealth .
Venezuela has the largest proven oil reserves in the world and once produced about 3 million barrels per day, although production is now well below 1 million barrels per day.
Corruption and a decline in oil prices led to economic collapse, hyperinflation, food and medicine shortages and the exodus of more than 7 million citizens in Venezuela. Meanwhile, Maduro tightened his power by banning or jailing political opponents and cracking down on protests. His re-election in 2018 was viewed as fraudulent by the US, the EU and the Venezuelan opposition.
In 2019, the Trump administration imposed tough sanctions on the country as it sought to oust Maduro by recognizing Guaidó’s presidency.
After Russia’s large-scale invasion of Ukraine last year, which drove up energy prices, Washington looked for ways to boost global oil supplies.
It has removed nearly 300 million barrels from U.S. strategic petroleum reserves and last year lifted some energy-related restrictions on Venezuela by granting Chevron a license from the Treasury Department to resume limited oil production from its joint venture with PDVSA.
Most analysts said easing U.S. sanctions would have limited short- to medium-term impact on Venezuelan production due to a decade-long collapse in capital investment. The Rystad research group assumes that Venezuelan oil production could increase by a maximum of 200,000 barrels per day six months after the easing of sanctions.
Source : www.ft.com