U.S. Considers Allowing Limited Oil Business to Continue in Venezuela

By Karen DeYoung and Samantha Schmidt

"Now do you try to reimpose sanctions, and at what level?" says AS/COA's Eric Farnsworth to The Washington Post.

Facing a mid-April deadline to decide whether to extend a temporary suspension of sanctions it granted Venezuela last fall, the Biden administration is considering ways to impose new limits on oil sales by the government of President Nicolás Maduro without increasing the number of Venezuelan migrants, raising U.S. gas prices or angering other Latin American governments.

Heavy sanctions barring oil sales, imposed by the Trump administration, were lifted in October after Maduro promised that he would allow competitive presidential elections this summer. Since then, the Venezuelan president has arrested members of the opposition and barred their main candidate from the race, leading the State Department to say in late January that, absent progress from Maduro, it would not renew a six-month sanctions suspension due to expire on April 18.

The U.S. Treasury “general license” issued last year allows buyers from around the world to purchase Venezuelan crude and pay for it in U.S. dollars for the first time since Trump’s maximum pressure policy effectively removed it from the international market. China, which ignored the U.S. sanctions, became Venezuela’s main buyer and Iran its main supplier of chemicals needed to dilute and produce the country’s heavy oil.

In the wake of Maduro’s failure to live up to his side of the bargain, the administration wants to punish him, while avoiding losing what it gained from the agreement, negotiated at the urging of the Venezuelan opposition. [...]

Critics expressed doubt that the sanctions relief would have the intended effect on Maduro.

“We gave up our leverage when we lifted the sanctions in the first place … based on a promise that everybody knew he wasn’t going to abide by,” said Eric Farnsworth, a Latin American expert with the Washington office of the Council of the Americas and the Americas Society and a former State Department official. “Now do you try to reimpose sanctions, and at what level?”...

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