U.S. Reimposes Sanctions on Venezuela Over Violations of Barbados Agreement

The United States has reimposed sanctions on Venezuela's vital oil sector, citing the government's failure to adhere to democratic principles ahead of the July 2024 presidential elections. The Biden administration announced it will not renew a license that had partially eased the punitive measures since October 2023, after a US-backed election deal was reached between the Venezuelan government and opposition in Barbados.

Under the agreement, the U.S. had allowed certain transactions and activities related to the Venezuelan oil industry. However, the U.S. State Department accused Venezuela of failing to uphold commitments made in the deal, which aimed to facilitate a negotiated solution to the country's political crisis. The U.S. says the Venezuelan government has not fully met the commitments made under the electoral roadmap agreement, including barring key political opponents from participating in the race.

Jorge Rodríguez, the head of the Venezuelan government delegation that signed the Barbados agreement, criticized the U.S. decision, accusing it of "failing its word." Rodríguez claimed the Venezuelan government has kept its word regarding the electoral calendar, international observers, and voting guarantees, but has consistently hindered efforts by opposition leaders to register as candidates.

The reimposition of sanctions is expected to significantly impact Venezuela's fuel sales and US oil companies operating in the country. Consulting firm Rystad Energy estimates that this new sanctions regime could lead to a decline of up to 120,000 barrels per day in Venezuela's oil production next year, compared to previous estimates. Venezuela's oil production has already declined by 70% since 2013 due to underinvestment, mismanagement, and the impact of international sanctions.

Why this matters: The move carries risks for Biden as he runs for re-election, as it could result in a jump in domestic oil prices or pressure from Venezuela's government leveraging its migration policy. Nearly 8 million Venezuelans have left the country since 2014 due to the country's economic woes.

The U.S. Treasury Department issued a new license for affected companies to wind down their operations in Venezuela by May 2024. The U.S. has repeatedly denounced the Venezuelan Supreme Court's decision to bar opposition candidate Maria Corina Machado from running in the 2024 presidential election. Republican Senators criticized the Biden administration's move as insufficient, accusing it of appeasing Maduro and his regime.

Key Takeaways

• US reimposes sanctions on Venezuela's oil sector, citing election concerns.
• US accuses Venezuela of failing to uphold commitments in Barbados deal.
• Sanctions expected to reduce Venezuela's oil production by up to 120,000 bpd.
• Move carries political risks for Biden as he runs for re-election.
• Republicans criticize Biden's move as insufficient, accusing appeasement of Maduro.