Back channel talks between Washington and Caracas have been occurring
since at least March
The Biden administration is reportedly gearing up to wind down sanctions against Venezuela’s authoritarian regime, clearing the way for Chevron to resume its oil operations and reopen U.S. and European markets.
People familiar with the proposal told The Wall Street Journal that any sanctions relief wound hinge on talks between the government of Venezuelan President Nicolás Maduro and the country’s opposition regarding free and
fair presidential elections in 2024. So far, such talks have failed to materialize.
FILE: Venezuelan President Nicolas Maduro stands before a meeting at the presidential palace in Caracas, Venezuela, on July 11, 2022. (AP
Photo/Ariana Cubillos, File / AP Newsroom)
Discussions of possible sanctions relief on Venezuela come as President
Biden faces mounting political pressure to address rising gas prices ahead
of the November midterms. It also comes as the Organization of the
Petroleum Exporting Countries (OPEC+) said it would be cutting oil
production by 2 million barrels a day, creating another headache for the president.
Such a deal between the U.S. and Venezuela could potentially enrage
critics on all sides. Venezuelan opposition leader Juan Guaido has asked
the U.S. government for details of Chevron’s expanded license request to operate in the country.
US OIL INDUSTRY MOCKS BIDEN AFTER OPEC+ ANNOUNCES PRODUCTION CUTS
Guaido’s team has also expressed concern that an agreement between Chevron
and Venezuela’s state oil company PDVSA underlying the license request
would violate Venezuelan law.
Chevon told FOX Business it continues "to conduct our businesses in
compliance with the current sanctions framework provided by the U.S.
Office of Foreign Assets Control (OFAC) under General License 8."
The oil giant said it is a "constructive presence in Venezuela, where we
have dedicated investments and a large workforce who are dependent on our presence."
"We remain committed to the safety and wellbeing of our employees and
their families, the integrity of our joint venture assets, and the
company's social and humanitarian programs during these challenging
times," Chevron said.
FILE: The logo of Dow Jones Industrial Average stock market index listed company Chevron (CVX) is seen in Los Angeles, California, United States,
April 12, 2016. (REUTERS/Lucy Nicholson/FILE / Reuters Photos)
The Biden administration has held talks with Venezuela in some capacity
since March. But a rapprochement gained momentum on Saturday when
Venezuela freed seven imprisoned Americans in exchange for the U.S.
releasing two nephews of Maduro's wife who had been jailed for years on narcotics convictions.
Many Maduro supporters remain distrustful of the U.S. "Empire," however, recalling the Trump administration's decision to impose sanctions on a Venezuelan governor who brokered the release of another American, Joshua
Holt, in 2018.
WHITE HOUSES PUSHES CLEAN ENERGY, SAYS US MUST REDUCE RELIANCE ON FOREIGN
OIL IN WAKE OF OPEC+ DECISION
Biden has had a hostile relationship with American oil producers since
becoming president. On his first day in office, he issued an executive
order canceling the Keystone XL pipeline which would have transported more
than 800,000 barrels of oil from Canada to the Texas coast per day. Biden
has also repeatedly blamed oil companies for this year’s surge in energy prices, which has been partially driven by Russian President Vladimir
Putin’s invasion of Ukraine.
Still, it remains to be seen whether a pivot to Venezuela would make
alleviate growing fuel costs in the U.S. Once a major oil producer,
pumping more than 3.2 million barrels a day in the 1990s, Venezuela’s dilapidated oil industry has been plagued by years of corruption, mismanagement, and environmental degradation, according to reports by oilprice.com.
"The Democrats right now have a harder story to sell on this because sure there's inflation. Sure, there are supply chain issues. But when
specifically it comes to oil, they have been so publicly, anti-American
oil, that when you start to hear that there's not enough of it, those two
dots aren't very hard to connect," Ryan Sitton, a former Texas oil
regulator, told FOX Business. "So, Biden is clearly trying to do anything
he can do to hold oil prices down, and thereby help keep gasoline prices
low, such that it doesn't hit them that hard in the midterms."
Sitton said encouraging Venezuela to produce more oil would run counter to
the Biden administration’s purported environmental agenda noting that it
would promote the rest of the world staying on the energy source longer.
"I think what they're doing is encouraging people to have access to
affordable sources of oil. Of course, it doesn't help the US oil business, which should be our primary focus. And at the same time, it clearly
doesn't help their agenda, which is to get off of hydrocarbons in
general," Sitton said.
The World Bank's 2022 Global Gas Flaring Tracker Report comparing flaring intensity indicated a barrel of oil produced in the United States was significantly cleaner than what was produced in Venezuela, with only Syria
and Yemen ranking worse.
A person walks past a gas station of state oil company PDVSA, in Caracas, Venezuela March 16, 2022. (REUTERS/Gaby Oraa / Reuters Photos)
"No question the world is hungry for oil and natural gas but the President
is missing the moment to expand production and refining here in the U.S.
by constantly looking outward to solve the world’s energy crisis," Jason Modglin, president of the Texas Alliance of Energy Producers, told FOX Business.
FOX Business has reached out to the White House for comment but did not
hear back before publication.