what the relief of American sanctions will change on oil production

what the relief of American sanctions will change on oil

The United States announced on Wednesday October 18 a partial reduction in sanctions targeting Venezuela, particularly on gas and oil transactions. But it is more of a thaw than a real rapprochement between Washington and Caracas, in a global context which had already moved the lines.

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A page is turning for Nicolas Maduro. “ In the United States of America I say : let’s turn the page, rebuild a relationship of respect and cooperation », insisted the Venezuelan president after the announcement of the relief of American sanctions against Caracas. But in reality, since the arrival of Joe Biden at the White House, and especially the Russian invasion of Ukraine, agreements already allowed Venezuela to export a small part of its oil production in the United Statesrecalls researcher Thomas Posado:

The war in Ukraine and the desire of the United States to find a supplier to replace part of Russian oil have really changed the situation. »

Read alsoVenezuela: Nicolas Maduro’s satisfaction after the announcement of the reduction of American sanctions

But it will take a long time for Venezuela to regain its pre-2015 production capacities. Its oil infrastructure suffers from a lack of investment and maintenance, and qualified personnel have fled abroad due to the economic crisis. For specialist Pierre Terzian, this will above all allow Venezuela to sell its oil at a better price:

Venezuela is forced to sell oil to China because it has a huge debt to pay off. It won’t change, it will continue. On the other hand, the discounts that the Venezuelans were forced to apply on the international market, because their oil was subject to sanctions, will undoubtedly decrease sharply, perhaps even disappear. »

However, the two specialists do not imagine a change in geopolitical and strategic alliance, especially not one year before a presidential election in the United States and Venezuela.

Venezuela: what American sanctions are lifted?

This is a response to Venezuela’s promise to organize a presidential election in 2024: after the historic agreement reached on Tuesday October 17 between the Venezuelan authorities and the opposition, the United States announced on Wednesday the reduction of sanctions against the economy of Caracas.

Venezuela enters the oil and gas market again and with force »: for Nicolas Maduro, it’s a winning comeback. But the Venezuelan president knows it: this will be done “ gradually “. Firstly because restarting the production system will take time, but also because the authorization from the United States to purchase gas and oil is only granted, initially, for a duration of six months.

The other announcement concerns gold transactions. They too are reauthorized, but we do not yet know for how long. The US Treasury explains that they aim to “ reduce gold trading on the black market “. Finally, Washington also allows the resumption of trading in Venezuelan debt securities on the secondary market. In other words: this should lead to an influx of liquidity.

The United States warns, however: all these relaxations can be modified or revoked if Venezuela does not respect its part of the contract. Certain sanctions also remain in force, notably the freezing of Venezuelan assets.

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