US reviewing whether it should reimpose oil sanctions on Venezuela

The Joe Biden administration is reviewing whether it should reimpose sanctions on Venezuela following a Jan. 26 decision by Venezuela's Supreme Court to bar political candidates from running against Nicolás Maduro in this year's presidential election, the US State Department said Jan. 27.

"The United States is currently reviewing our Venezuela sanctions policy, based on this development and the recent political targeting of democratic opposition candidates and civil society," State Department spokesman Matthew Miller said in a statement.

Venezuela's Supreme Court of Justice on Jan. 26 disqualified Maria Corina Machado from running for the presidency.

"The Venezuelan Supreme Court's January 26 decision to disqualify democratic opposition primary winner Maria Corina Machado is inconsistent with the commitment by Nicolás Maduro's representatives to hold a competitive Venezuelan presidential election in 2024. The reinstatement process lacked basic elements, as Machado neither received a copy of the allegations against her nor was afforded the opportunity to respond to those allegations," Miller said.

"This deeply concerning decision runs contrary to the commitments made by Maduro and his representatives under the Barbados electoral roadmap agreement to allow all parties to select their candidates for the presidential election," he said.

The so-called Barbados Agreement, which agreed to hold free presidential elections, remove the disqualifications to presidential candidates and release political prisoners, was signed between the government of Nicolás Maduro and the Unitary Platform on Oct. 17, 2023.

The Biden administration on Oct. 18 partially eased sanctions on Venezuela's oil and mining sector for six months in response to the electoral roadmap deal. At the time, the US Treasury department set a Nov. 30 deadline for Venezuela to set up a process to reinstate opposition candidates and begin to release political prisoners.

Just ahead of the deadline, Venezuela agreed to allow opposition candidates to appeal their disqualifications.

The easing of US sanctions has allowed an increase in oil production and exports.

Venezuela's crude production averaged 795,000 b/d in December, up from 770,000 b/d in September, according to a PDVSA production report reviewed by S&P Global Commodity Insights. S&P Global estimates that Venezuela could increase production capacity by about 100,000 b/d under the eased sanctions.

The lifting of sanctions also allowed the Maduro administration to boost imports of gasoline to ease local shortages and halt the decrease in production in the Orinoco Belt with naphtha imports.

Venezuela will receive roughly 2 million barrels of gasoline and naphtha in January, all of which is originating from the US, S&P Global Commodities at Sea data showed Jan. 25. While that total is lower than the roughly 2.2 million barrels imported in December, imports have risen sharply from roughly 1 million barrels in November and 686,000 barrels in October, the data shows.

Supreme Court ruling unappealable

The Political Administrative Chamber of the Supreme Court of Justice confirmed the disqualification imposed by the Comptroller General's Office to Machado for a period of 15 years, according to the sentence issued Jan. 26.

The court also ratified the disqualification of Henrique Capriles, leader of the Primero Justicia party, who is also a contender for the Venezuelan presidency.

The rulings of the Supreme Court of Justice are final and unappealable.

"The regime decided to end the Barbados Agreement," Machado said on social media Jan. 26. "Maduro and his criminal system chose the worst path for them: fraudulent elections. That is not going to happen."

Three other political leaders had their disqualifications lifted. More decisions were expected.

In the sentence, the highest judicial authority controlled by the Maduro government declared that the request filed by Machado "does not comply with the requirements established and demanded in the Barbados Agreement."

The disqualification of Machado, one of the most popular opposition leaders and most likely to defeat Maduro in a presidential election, came just hours after the US State Department raised concerns that the detention of 33 Venezuelans -- including members of the political opposition -- goes against an agreement that led the US to lift some sanctions on the Venezuelan oil and mining sectors.

The Attorney General of Venezuela's Office raised to 36 the number of Venezuelans arrested on charges of participating in conspiratorial activities to overthrow Maduro, according to a statement to local media on Jan. 26.

Maduro also threatened in late 2023 to annex the disputed oil-rich Essequibo region of neighboring Guyana. The US has urged Venezuela to respect the current border unless or until the International Court Justice decides otherwise.