US refineries are preparing to resume importing Venezuelan oil after many years of sanctions imposed on the government of Venezuelan President Nicolas Maduro.
Valero Energy, America’s second-largest oil refiner, is seeking permission from the US Treasury Department to resume importing Venezuelan oil, according to Reuters.
US refineries hope to obtain permission similar to what Chevron obtained in November 2022, for a period of 6 months, subject to renewal.
Chevron license 6 months
The US Treasury Department granted Chevron permission to resume oil production and export from Venezuela’s fields to the United States, 4 years after it was banned in the context of tense diplomatic relations with the Caracas government since the period of former US President Donald Trump.
The administration of current US President Joe Biden has eased the sanctions imposed on Venezuela, which is a member of the Organization of Petroleum Exporting Countries (OPEC).
The easing of sanctions came within the framework of encouraging political dialogue with the forces opposing current Venezuelan President Nicolas Maduro, who is seen as a disciple of the late leftist Latin American leader Hugo Chavez.
American, European and Asian oil companies pressured the White House administration to lift the sanctions imposed on Venezuela since 2019, as its activities were affected by these sanctions and other countries such as Iran, Russia and China benefited.
political accounts
American companies have intensified their pressure on the Biden administration to ease sanctions imposed on the Venezuelan oil sector more broadly, especially after the repercussions of the Ukrainian war, which caused a global energy crisis that has not yet subsided for the second year in a row.
And the White House is still reluctant to ease sanctions in a broader way, in the context of political calculations aimed at pressuring the President of Venezuela, to dialogue with the opposition forces that are more inclined to the United States in orientation, calculations of interests and foreign relations.
US refineries are exerting similar pressure on President Biden to allow the resumption of importing neighboring Venezuelan oil, due to its ease of transport and its lower costs compared to oil shipments coming from countries in Africa, Asia, or even Europe.
Valero Energy – the second largest US refinery – is awaiting obtaining a license from the US Treasury Department to resume the activity of importing Venezuelan crude oil of various types.
Refineries affiliated with Phillips and Valero have taken 66 shipments of Venezuelan oil exported by the US company Chevron since January 2023, according to US customs data.
conference in Colombia
Muya bien EEUU por acceptar la propuesta de una conferencia internacional sobre la democracia en Venezuela. Un continente sin sanciones, en Paz y con mucha democracia.
– Gustavo Petro (@petrogustavo) March 29, 2023
The US authorities granted permission to Chevron to resume its activities, within the framework of negotiations to provide humanitarian aid to Venezuela, and other talks before the upcoming presidential elections in 2024.
Venezuela requested the release of frozen funds abroad, according to the sanctions imposed since 2019, but talks on this part stopped weeks ago, and a new date has not yet been set for its resumption, according to what was monitored by the specialized energy platform.
The United States is preparing to participate in attending an international conference on democracy in Venezuela, which is to be held in the Colombian capital, Bogota, which may represent an opportunity to resume negotiations between the two sides, according to a post on the Twitter account of Colombian President Gustavo Petro.
The President of Colombia has not yet set a date for the conference, merely indicating that the United States has agreed to the invitation extended to it to participate, according to what was monitored by the specialized energy platform.
The White House commented
The Valero Energy refinery hopes to obtain an exemption from the Treasury Department that would allow it to contract directly with Venezuela’s state oil company, Petroleos de Venezuela.
The refinery wants the permission to be issued quickly, while the White House believes that it should wait until the Venezuelan president makes serious concessions to the allied political opposition in the country.
A spokesman for the White House National Security Council said the Biden administration had not issued new authorizations in this regard, according to Reuters.
The spokesman pointed out that the previous licenses granted to Chevron or European oil companies – such as the Italian Eni or the Spanish Repsol – are concerned only with oil or debt exchanges, and do not extend to the payment of cash to the Venezuelan oil company or others.
Prohibition of cash payments
The United States is banning all cash payments to the administration of President Nicolás Maduro under the sanctions relief, and may include the issue on the next negotiating table with Caracas, if the president makes satisfactory concessions to the US-allied opposition, according to the specialized energy platform.
Valero Energy has long-term contracts in Venezuela signed before the sanctions, and hopes to obtain Treasury permission to resume contract terms that have not yet expired, according to the specialized energy platform.
The American company was among the 3 largest importers of Venezuelan oil before sanctions were imposed on PDVSA in 2019.
The resignation of the oil minister
The resumption of Venezuelan crude oil exports did not increase the country’s overall exports this year, according to PDVSA data and Refinitiv Eikon, a vessel and tanker tracking platform.
The average export of the American company Chevron of Venezuelan oil was approximately 86,000 barrels per day during the month of February 2023.
The new head of the “Petroleos de Venezuela” company suspended oil supply contracts, after discovering huge financial manipulations in previous freight payments, which led to the suspension of the country’s exports to its 4 main clients authorized to import, namely: Chevron, Iran, Cuba, and the Chinese company Hangzhou Energy.
The payment fraud investigation led to the resignation of powerful Venezuelan Oil Minister Tarek El Aissami on March 20, 2023, with the arrest of senior officials at PDVSA, the state oil company.
Venezuelan police and intelligence services are still arresting officials related to the corruption scandal until March 31, 2023, amid angry statements by President Nicolas Maduro, vowing to continue the campaign of arrests of all those involved in the case, according to the specialized Argos Media website.
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