A high-level delegation from the United States Government would be visiting Caracas with the intention of proposing to Nicolás Maduro an economic agreement aimed at supplying some energy demands in its economy, in force after the sanctions against Russia for invading Ukraine.
The proposal would include new measures to relax international sanctions on Venezuela, also giving Caracas options to recover its oil production in a context of high international prices. With this tempting initiative, the United States moves its chips to try to mitigate Russia’s geopolitical influence among its Latin American allies.
The information published by The New York Times, has been received with enormous secrecy among local sources and has not been officially commented on. Informed spokesmen, however, take for granted that talks are underway. Sources close to the US embassy in Venezuela confirmed the official visit, but stated that the high-level delegation – the highest to visit the country in a long time – had come to Venezuela only to discuss the possible release of US political prisoners in Venezuela, including the six managers of the Citgo subsidiary. In the Venezuelan opposition —clearly affected by this equation— there is complete secrecy about the news.
The US markets were the traditional destination for Venezuelan oil exports before Hugo Chávez came to power in 1999. After the sanctions against the government of Nicolás Maduro, the link had almost completely disappeared.
Francisco Monaldi, an oil economist, academic and international consultant, clarifies that the influence of current Venezuelan oil production on the international market — some 800,000 barrels per day — is modest. “In the short term, it will be difficult for Venezuela to sustainably maintain the production of one million barrels per day,” he says. “The production scales of Russia and Venezuela are incomparable; there is no expert capable of sustaining that Venezuela will have an influence in the energy market in the next six months.”
The agreement may make sense, according to Monaldi, in the medium term: the end of international sanctions could offer Venezuela the possibility of clearly increasing its current production. The Venezuelan high government seems determined to change the institutional investment framework to decisively encourage private participation in its deposits, which are the most abundant in reserves in the world.
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“Right now, the United States is especially interested in supplying some 500,000 barrels a day of heavy crude oil and derivatives that Russia was selling to the United States, suitable for its refineries in the Gulf of Mexico, and that Venezuela produced years ago,” says Monaldi, and He adds that none of this is going to solve, by itself, the knots linked to the rise in fuel prices.
Since the government of Donald Trump, while Maduro consolidated his autocracy, Caracas has sent numerous conciliatory messages to the White House proposing mutual coexistence and agreements on energy matters with facilities for investment, which include the end of international sanctions on his government, accused of forging his re-election and destroying the country’s democracy. After years of denying the existence of a crisis, the official discourse of the Venezuelan state blames international sanctions for the collapse of the economy and the country’s most important ills.
On the other hand, in the last two years the steps taken by Venezuela to strengthen its political alliance with Russia, which has a very outstanding chapter in the military field, have been very clear. Maduro has expressly justified and supported the Russian invasion of Ukraine.
A source linked to the private sector of local oil production, who preferred to keep his name confidential, comments that, with this initiative, the Biden administration can offer Caracas to lift its sanctions, or significantly reduce them, in exchange for Maduro organizing a clean and verifiable elections in 2024 that end the tensions between the United States and Venezuela.
Recently, Diosdado Cabello, number two in the regime, declared for the second time that “it is not known” when the presidential elections will be held in Venezuela, arguing that given the harassment of his government by the United States and Europe, such a thing looks uphill.
The Republican Marco Rubio declared, upon hearing the news of these negotiations, that “Biden is using the excuse of Russia to propose the agreement that he always wanted to make to Maduro. Instead of producing more local oil, they want to replace the oil that he compared to a murderous dictator (Putin) by buying from another murderous dictator (Maduro).
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