The US government has reached an agreement with Venezuela to lift some of its sanctions against the Latin American country. The move will allow Chevron Corporation, an American multinational energy corporation, to resume pumping oil in Venezuela.
The move was made possible by a deal signed on Wednesday between the Venezuelan government and the opposition.
Venezuela has been in a state of socioeconomic and political crisis for over a decade. Several states, including the US, have levied sanctions against Venezuela for years in response to the growing authoritarianism of Venezuelan President Nicolas Maduro.
This month, representatives of President Maduro met members of the opposition for talks in Mexico City. They agreed to the creation of a humanitarian fund that will be used to alleviate the country’s pervasive socioeconomic and political crisis.
The fund will be managed by the United Nations (UN). It will primarily be used to help provide food and education to the poor.
The deal has facilitated the lifting of some sanctions. Approximately $3 billion (€2.88 billion) worth of frozen Venezuelan assets held in foreign banks will steadily be unfrozen. The unfrozen assets will help to fund humanitarian efforts.
The US and EU, as well as several South American states, have sanctioned Venezuela since the crisis began in 2010. In 2015, US President Barrack Obama issued a presidential order which designated Venezuela as a “threat to [US] national security.”
The Obama administration mostly levied sanctions against individuals. However, under President Donald Trump, the US sanctioned Venezuelan industries, including the energy sector. This affected the ability of firms like Chevron to maintain oil production activities in the country.
Chevron to resume oil output
The US government welcomed the deal, and President Joe Biden’s government has allowed the resumption of oil production by Chevron.
The Treasury Department’s Office of Foreign Assets Control issued Venezuela General License 41. This enables Chevron to “resume limited natural resource extraction operations in Venezuela.”
For now, the majority of US sanctions remain in place. The Treasury Department reiterated that “the United States will vigorously enforce these sanctions and will continue to hold accountable any actor that engages in corruption, violates U.S. laws, or abuses human rights in Venezuela.
However, if Venezuelan officials continue to address the political crisis in a manner deemed appropriate by the international community, there may be further opportunities to lift sanctions.
“This action reflects long-standing US policy to provide targeted sanctions relief based on concrete steps that alleviate the suffering of the Venezuelan people and support the restoration of democracy,” continued the statement by the US Treasury Department.
Chevron welcomed the deal but stressed that the continuation of oil production would be a slow process. Chevron CEO Mike Wirth said it could take months or years to maintain and refurbish oil fields in Venezuela. “It wouldn’t be an instantaneous effect,” he told Bloomberg.