Now that the US has lifted sanctions on Venezuela for Chevron to ship crude to the US has been made, we repeat our Editorial from May analyzing the US’ then predicted decision.
“Back in early March of this year, there were some eyebrows raised when US President Biden sent a delegation to Venezuela to engage the Maduro Administration. Most felt that the USA would lift the sanctions on Petroleos de Venezuela (PDVSA), and the oil embargo that had been imposed for human rights’ violations by the Trump Administration in 2017 and 2019. There were discussions on possibly reopening some trade links by allowing crude-for-diesel exchanges on “humanitarian” grounds. But, just days later, the Administration backed off in light of the backlash led by Sens. Marco Rubio, Rick Scott and Bob Menendez.
“However, last week, the White House announced that it was reconsidering its restrictions on Venezuelan oil, and was again entering discussions with Maduro. The US will now allow Chevron Corp., which had been allowed to conduct minimal activities with PDVSA, to negotiate its oil licence, thereby reducing certain sanctions on Venezuela. Although no further oil drilling or additional revenues for the Maduro Government would be permitted, as in March, Venezuela firmly welcomed the opening.
“The US has not been very clear about the possible volte-face, or even the softening of Trump’s very clearly articulated justification for regime change, based on the Responsibility to Protect (R2P) principle, sometimes referred to as “humanitarian intervention.” The Maduro regime’s policies, of course, have sent some six (now seven) million Venezuelan refugees pouring into neighbouring countries, including Guyana, and causing severe social and economic disruptions. One possibility is that the White House reacted to a request by Maduro’s political Opposition to ease sanctions, although the Opposition said the request came from Maduro. The Biden Administration, then, could be hoping that the carrot of softening sanctions on PDVSA and the embargo on oil would be more effective than Trump’s stick to engender greater political concessions with the Opposition – and putting Venezuela on track for free and fair presidential elections in 2024.
“Then there is the oil elephant in the room. Since March, the world has been plunged into a possible recession on account of the disruptions to global oil supplies, due to sanctions imposed by the US and Europe on Russian oil and gas exports because of the latter’s invasion of Ukraine. For its own oil supply, the US needs heavy crude oil – which Venezuela can produce and supply – to mix with its light crude to produce diesel for its industrial base. Europe needs oil, period.
“In the meantime, Biden’s overtures have worked to Maduro’s advantage, even with anti-Maduro hardliners like Brazil that, two years ago, had closed down their Embassy in Venezuela. Last month, Brazil’s Foreign Minister, Carlos França, stated against the background of the March overture, “At the moment, in which the United States considers making an exception to the embargo on Venezuelan oil exports, it seems to me that we can think in terms of re-evaluating the issue of diplomatic relations.”
Ironically, Biden’s overture to Venezuela has increased the pressures on his Administration to invite Venezuela to the Summit of the Americas’ conclave in Los Angeles on June 6th.
“But after that March meeting, another goal had been hinted at than the economic one of the US obtaining Venezuelan oil – geopolitical. Juan Gonzalez, the hardliner who headed the delegation to Venezuela in March, clearly indicated that the use of sanctions goes far beyond their stated purpose: “The sanctions on Russia are so robust that they will have an impact on those Governments that have economic affiliations with Russia, that is by design.” Venezuela has very strong relations with Russia, and even the BBC had speculated: “So, could the US visit be more than just oil? An attempt to change Venezuela’s political allegiances, perhaps?”
“A Bloomberg editorial was very sobering: “Toppling Maduro was a justifiable goal at a time of relative stability, but the strategic environment has changed. Disgusting as it may be, engaging with the Venezuelan regime is critical to protecting core US interests and containing Russian influence in the Western Hemisphere.”
“The question is: Where does Guyana fit in with this possible US pivot?”