Page 5 - LatAmOil Week 09 2021

LatAmOil COMMENTARY LatAmOil

“No rush” to ditch sanctions Swiss company, for allegedly “doping” Venezue-
Additionally, a White House official told Reuters lan crude cargoes – that is, adding chemicals to
last week that the president was in “no rush” to disguise their origin.
eliminate sanctions on Venezuela. He also indi-
cated that no major changes were likely in the Circumventing sanctions?
short term, as existing policies left enough room The Biden administration has not revealed
to enable the delivery of humanitarian aid. whether it is willing to take a similar approach.
The official, who spoke on condition of ano- That is, it has not said whether it will follow
nymity, said that Biden did not want to copy Trump’s lead in extending the threat of sanctions
Trump’s “maximum-pressure” approach, as it to companies not directly involved in the pro-
involved too much in the way of unilateral action duction, processing or purchase of Venezuelan
to put pressure on Venezuela. He also stated that crude.
Washington would consider softening restric- The new president may have to make deci-
tions on trade with Caracas and investment in sions on this front soon, since there are no signs The Biden
that country’s oil sector if Maduro took steps to that Maduro and his supporters are backing administration
demonstrate openness to negotiations with the down on trying to move oil to market. Rather,
political opposition. there are questions about just how much the has not said
“We’re in no rush to lift sanctions,” he told national oil company (NOC) PdVSA has been
Reuters. “If the regime undertakes confi- selling recently. whether it will
dence-building measures that show that they’re According to a Bloomberg report pub-
ready and willing to engage in real conversations lished earlier this week, ship-tracking data extend the threat
with the opposition ... if they’re ready to take and shipping reports indicate that Venezuelan of sanctions to
serious steps, then we will consider the allevia- oil exports dropped to 418,857 barrels per day
tion of sanctions.” (bpd) in February, down by 13% on the previous companies that
The official did not say what steps Maduro month. However, other sources have suggested
would have to take to gain the Biden administra- something quite different. For example, Refini- are peripherally
tion’s confidence. He stressed, though, that the tiv Eikon data cited by Reuters indicate that the
president and his team would be looking out for South American state exported a total of 732,107 involved in
signs that the Venezuelan president was engaged bpd of crude oil and petroleum products in Feb- trading crude
in “delaying tactics” – that is, using bilateral talks ruary, up by 35% month on month. Reuters said
as a way to divide opposition forces and consol- that the increase had been driven partly by a from Venezuela
idate his own power. 33% jump in the volume of residual fuel oil ship-
Additionally, he indicated that US authorities ments to Asia, but it also put Venezuela’s total
did not have much confidence that Maduro was crude exports at 568,200 bpd and indicated that
prepared to meet that Washington’s conditions. volumes had gone up from January to February.
He told Reuters that the Venezuelan govern- The discrepancy between the Reuters and
ment had been “actively preventing the delivery Bloomberg figures is not easy to explain and may
of humanitarian assistance.” arise from the fact that the two news agencies
are drawing on different sources. It is worth not-
Broad continuity of policy ing, though, that Reuters pointed to an uptick
The official’s statements seem to indicate that in the volume of Venezuelan oil handled by
there will be broad continuity of policy with little-known trading firms that some maritime
respect to US sanctions on Venezuela, despite observers have described as “phantom compa-
the election of a new president. It does remain nies” – and that it mentioned an increase in fuel
to be seen, though, how Biden and his team will oil shipments. These reports may indicate that
react to Maduro’s ongoing efforts to evade trade Maduro’s regime is actually stepping up efforts
restrictions. to circumvent US sanctions. If so, US authorities
The Trump administration had taken care- should consider how and whether they intend
ful note of these attempts and responded to to react. ™
them by trying to block every avenue towards
transactions involving Venezuelan crude oil.
For example, it extended the sanctions regime
to cover traders that were acting as middlemen
for the sale of Venezuelan oil to buyers in China
and elsewhere, and it threatened to do the same
to shipping companies and financial service pro-
viders that facilitated the export of Venezuelan
production. In August 2020, it went so far as to
seize a group of Venezuela-bound tankers carry-
ing gasoline from Iran, another country facing
US sanctions.
It also remained intent on following this
course even after Biden’s successful election bid.
In mid-January, just a few days before Trump left
office, it penalised a Maltese trading company,
Elemento Ltd, on charges of reselling Venezue-
lan oil, and also sanctioned Swissoil Trading, a Venezuelan President Nicolas Maduro (Photo: Twitter)

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