Barring last-minute concessions from Maduro, the Biden administration has made it clear that it is unlikely to renew a six-month hiatus on sanctions granted to the OPEC member last October, following a deal between the Venezuelan government and the opposition around elections.
The Biden administration has signaled it could reimpose oil sanctions on Venezuela as early as Thursday in response to what U.S. officials see as President Nicolás Maduro's failure to honor his commitments to hold free and fair elections this year.
Unless Maduro makes last-minute concessions, the United States has made clear it is unlikely to renew a six-month license that granted the OPEC member partial sanctions relief since October, following an electoral deal reached between the Venezuelan government and the opposition. It expires shortly after midnight EST (0400 GMT Thursday).
In recent months, Washington had repeatedly threatened to reinstate punitive measures against Venezuela's vital oil and gas sector unless Maduro made good on his promises, including allowing the opposition to field the candidate of their choice against him in the July 28 elections.
The Maduro government has complied with some of the terms of the agreement signed in Barbados.
Withdrawing the most significant element of US sanctions relief would mark a major step back in US President Joe Biden's policy of re-engaging with the Maduro government.
But the Biden administration is expected to stop short of a full return to the "maximum pressure" campaign waged under former U.S. President Donald Trump, according to people familiar with the matter.
The US decision has been weighed by concerns about whether re-imposing sanctions on Venezuela's energy sector could drive global oil prices higher and increase the flow of Venezuelan migrants to the US-Mexico border as Biden campaigns to re-election in November.
"We have made it very clear that if Maduro and his representatives did not fully implement their agreements under the Barbados agreement, we would reimpose sanctions, and I would just say stay vigilant," said US State Department spokesman Matthew Miller at a daily briefing in Washington on Tuesday. He declined to give further details.
Maduro's government has repeatedly reacted by defying Washington's warnings.
"International companies continue to come to Venezuela," Venezuelan Oil Minister, Pedro Tellechea, said in Caracas. "With or without sanctions, Venezuela will be respected."
Venezuela's oil exports rose in March to their highest level since early 2020 as customers rushed to complete purchases ahead of the possible return of sanctions, Reuters reported this month.
DELIBERATIONS ON SANCTIONS OPTIONS
In deliberating how far to go, Biden's aides would have discussed a number of options ahead of the expiration of the U.S. Treasury license that has allowed Venezuela to freely sell its crude, U.S. sources said. Among the measures they considered was allowing Venezuela to continue shipping oil but re-imposing a ban on the use of US dollars in such transactions.
Not renewing the current license would not rule out the possibility that the United States could issue a new version to replace it at some point if Maduro begins to give ground on his electoral commitments.
However, without a general license, most of Venezuela's state oil company, PDVSA, foreign partners may have no choice but to increase pressure to obtain individual authorizations from the United States, which they have been seeking for years.
A group of US Republican senators sent a letter to Biden urging his administration not to renew the license, saying "we must not cede US influence by lifting US sanctions while the Maduro government deliberately ignores its obligations."
The Biden administration initially reengaged diplomatically with Maduro as the United States sought ways to get more oil into global markets to offset rising crude prices due to Western sanctions imposed on Russia for its invasion of Ukraine in 2022. Those contacts led to a deal to ease some of the harsh Trump-era sanctions on Caracas.
Miller acknowledged to reporters that Maduro has "maintained certain aspects" of the Barbados agreement, including establishing an electoral calendar and inviting international observers.
But Venezuelan electoral authorities have maintained an electoral ban on María Corina Machado, who resoundingly won the opposition primaries last October, and the opposition is currently conducting internal negotiations over who could run as a replacement.
Maduro's re-election in 2018 was rejected by the United States and other Western governments as a farce.
The United States has also ordered a series of arrests in recent months of opposition politicians and activists.
