US to allow oil and gas trading with Venezuela in temporary sanctions reprieve

The US Treasury’s Office of Foreign Assets Control (OFAC) issued four general licences that suspend some of the sanctions against Venezuela. 

US Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson issued a statement on the general licences, saying, “The United States welcomes the signing of an electoral roadmap agreement between the Unitary Platform and Maduro representatives. Consistent with US sanctions policy, in response to these democratic developments, the US Department of the Treasury has issued general licences authorising transactions involving Venezuela’s oil and gas sector and gold sector, as well as removing the ban on secondary trading. 

The Treasury said it is prepared to amend or revoke the sanctions-lifting authorisations at any time, should the Maduro regime fail to uphold their commitments.

"All other restrictions imposed by the United States on Venezuela remain in place, and we will continue to hold bad actors accountable. We stand with the Venezuelan people and support Venezuelan democracy,” the Treasury said.

The first six-month general licence temporarily authorises transactions involving the oil and gas sector in Venezuela. The licence will be renewed only if Venezuela meets its commitments under the electoral roadmap as well as other commitments with respect to those who are wrongfully detained. A second dealt with Venezuela’s gold mining industry. OFAC also amended two licences to remove the secondary trading ban on certain Venezuelan sovereign bonds and PdVSA debt and equity. The ban on trading in the primary Venezuelan bond market remains in place.  

With the country in a political crisis linked to the Maduro regime’s anti-democratic policies and under heavy economic sanctions since the disputed 2018 election, Venezuela announced a breakthrough this week as it signed an agreement stipulating that a new presidential election will be held in the second half of 2024. Opposition political parties and civil society formed the Unitary Platform in April 2021, after international support for a US-backed opposition party led by Juan Guaido declined and Norway-led negotiations with the authoritarian Maduro regime stalled repeatedly. The new agreement does not offer a path to reinstate opposition politicians to the offices they have been banned from holding.