Page 6 - NorthAmOil Week 21 2022

NorthAmOil COMMENTARY NorthAmOil

Is Venezuela Europe’s answer

for the loss of Russian oil?

The US government appears to be moving towards loosening restrictions on

trade with Venezuela, at least partly out of a desire to address disruptions

on the European oil market

GLOBAL THE US government is reported to be moving US politicians react
towards loosening the restrictions placed on It remains to be seen how quickly these changes
WHAT: trade with Venezuela. take hold.
More reports have One source familiar with the matter told More than a week has passed since AP and
emerged indicating that Bloomberg last week that Washington was Bloomberg went public with reports on the
Washington is looking to looking to lift some of the sanctions placed possibility of a policy shift, and the US govern-
soften sanctions policy. on Venezuela’s national oil company (NOC) ment has made no official announcements on
PdVSA. According to the source, the policy this front. (Venezuela’s Vice President Delcy
WHY: shift aims to facilitate crude exports to for- Rodriguez, by contrast, posted a statement on
The US aims to facilitate eign markets, especially by Eni (Italy) and her Twitter account trumpeting that Washing-
talks between Maduro Repsol (Spain), while also allowing the US ton had authorised US and European compa-
and the opposition, but major Chevron to renegotiate its Venezuelan nies to “negotiate and restart operations” in her
it is also keen to see licences and smoothing the way toward nego- country.)
Venezuela produce more tiations between President Nicolas Maduro’s Meanwhile, reports of a possible softening
oil that can be exported administration and the Venezuelan political in the sanctions regime have drawn a frosty
to Europe. opposition. response from some US politicians. For exam-
Other newswires have issued similar reports. ple, Bob Menendez, the New Jersey Democrat
WHAT NEXT: The Associated Press, for example, quoted two who serves as chairman of the Senate Foreign
PdVSA is not in a position senior US officials as saying last week that the Relations Committee, issued a statement last
to have much of an administration of US President Joe Biden was week criticising the idea of taking Malpi-
impact on European making some limited revisions to the sanctions ca-Flores off the list of sanctioned individuals.
crude markets, but it regime in order to ease the path toward nego- Any plan that relies on giving Maduro “a hand-
would stir interest if it tiations between Caracas and the Venezuelan ful of undeserved handouts” in the hope that
returned to the USGC opposition. he will negotiate with his political opponents
region amidst a broader Specifically, the officials said, the Biden “is a strategy destined to fail,” the statement Reports of
shift in global trade flows. administration will remove Carlos Erik Mal- declared.
pica-Flores, PdVSA’s former vice president of Menendez later reiterated this sentiment, a possible
finance and a nephew of Venezuela’s first lady telling reporters: “Removing Flores from the softening in the
Cilia Adela Flores de Maduro, from the US list of sanctioned people is obviously a gift to
Treasury Department’s list of sanctioned indi- Maduro.” sanctions regime
viduals. It will also permit Chevron to negotiate For his part, John Barrasso, the top-ranking
its operating licence with PdVSA, though this Republican on the Senate Energy and Natural have drawn a
permission will not extend to any drilling or Resources Committee, said he did not want
production activities, they stated. (They spoke to see the US government striking deals with frosty response
to AP on condition of anonymity, as no formal authoritarian regimes such as the one headed by from some US
announcements have yet been made on changes Maduro. He also urged Washington to make the
in US policy.) US oil and gas industry a higher priority than politicians.
More recently, Reuters has said that Chev- PdVSA. “Our experience buying Russian energy
ron will see its licence to operate in Venezuela should have taught President Biden that buying
reinstated very soon. Four people close to the energy from tyrants is a dangerous proposition
talks told the news agency on May 24 that the ... Funding despots isn’t in the national interest;
Treasury Department was preparing to renew supporting American energy is,” he said in a
the licence, even though it probably would statement.
not agree to grant permission to operate on As of press time, the Biden administration has
the expanded terms that the oil company had not made any official statements about its stance
requested. on Venezuela. However, the events reported

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