Biden Administration Allows Chevron To Pump Oil In Venezuela—Here's Why It's So Controversial
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Topline
The Biden Administration granted a license to Chevron to resume oil production in Venezuela—easing sanctions imposed on the country in 2019 over corruption and human rights concerns—though a senior U.S. official is claiming it's not related to the energy crunch caused by the war in Ukraine.
The U.S. Treasury Department issued a license for Chevron to resume oil production in Venezuela, ... [+] following negotiations with President Nicolas Maduro.
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Key Facts
The six-month license from the federal Treasury Department's Office of Foreign Assets Control allows the California-based oil giant to resume "limited natural resource extraction operations."
Recent talks between the U.S. and Venezuela began in March, one month after Russia's invasion of Ukraine, as President Joe Biden began searching for alternatives to Russian oil and the U.S. looks to weaken Russia's economy as the war drags on.
Still, a senior U.S. official, speaking anonymously, told the Associated Press the deal was unrelated to efforts to increase the U.S. energy supply, and was not expected to impact oil prices.
The announcement also comes after the Biden Administration released more than 200 million barrels from the federal emergency oil reserve in an effort to curb prices, amid record gas prices and after OPEC+ oil-producing countries (including Venezuela) decided last month to cut oil production.
Federal officials granted the license after Venezuelan President Nicolas Maduro—who has been harshly criticized for human rights abuses—agreed with opposition party members to a humanitarian spending plan focused on education, public health, food security and electricity programs, and to continue negotiating around efforts to hold free and fair elections in 2024.
The Biden Administration called the announcement an "important step in the right direction," CNN reported—as the Latin American country remains in a political stalemate over who its leader is, with several countries, including the U.S., recognizing opposition party member Juan Guaido as its president after an allegedly fraudulent 2020 election.
The license comes with several limitations, however, including a provision prohibiting Chevron from conducting any transactions with Iran or Russian owned-entities in Venezuela, Bloomberg reported.
It also prohibits the country's oil company, Petroleos de Venezuela, S.A.—which the U.S. sanctioned in 2019—from receiving profits from Chevron's oil sales, which are intended to go instead to repaying debt owed to Chevron, according to the White House official.
Crucial Quote
In a statement, federal officials said the measure is aimed at "targeted sanctions relief" for "concrete steps that alleviate the suffering of the Venezuelan people and support the restoration of democracy," adding the Treasury Department will "continue to hold accountable any actor that engages in corruption, violates U.S. laws or abuses human rights" in Venezuela, which is home to the largest oil reserves in the world. The Treasury Department maintains the right to revoke the agreement at any time if Venezuela does not follow through on its end of the negotiations.
Contra
Speculation of negotiations started circulating when a U.S. delegation visited the Venezuelan capital of Caracas in March, prompting GOP lawmakers to theorize the trip was a sign the Biden Administration's goal was to replace the loss of Russian energy, following the Kremlin's invasion of Ukraine in February. Following reports last month that the White House was looking to ease sanctions on Venezuela, Sen. Dan Sullivan (R-Alaska) called the move "national security suicide," complaining that while Biden has shut down U.S. energy production, primarily in Alaska, he would then go "on bended knee to dictators in countries like Iran, Saudi Arabia & Venezuela."
Key Background
U.S. companies have been prohibited from conducting business with Venezuela's state-owned oil company since 2019, as the result of economic sanctions aimed at forcing Maduro out of power. In addition to allegations of rigging the 2020 election, Maduro's government has been accused of crimes against humanity, including by authorizing gruesome torture and extrajudicial killings, according to a 2020 report from the United Nations human rights body. Previous rounds of negotiations between Maduro and his opposition have fallen through, including most recent attempts in Oct. 2021. Venezuela was able to continue producing oil largely through the help of Russian energy companies and banks, the New York Times reported.
Big Number
679,000. That's how many barrels of oil Venezuela produced each day, on average, in October, according to data sourced from an OPEC report. It's a slight increase from September, but well below the 2.9 million barrels it had been producing before the sanctions, Bloomberg reported.
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Following reports last month that the White House was looking to ease sanctions on Venezuela, Sen. Dan Sullivan (R-Alaska) called the move "national security suicide," complaining that while Biden has shut down U.S. energy production, primarily in Alaska, he would then go "on bended knee to dictators in countries like Iran, Saudi Arabia & Venezuela."
Yup, I'll go along with that!
What’s wrong with depleting their oil supply and trying to stretch ours as far as we can? Plus, brutal dictators supply most of the worlds oil anyhow outside of the US and Canada. Not sure why Venezuela is a special case.
Is that how you interpret this?
Our what?.... Reserves? Expanded production?
Not sure why Venezuela is such a special case either.
Venezuela has the largest oil reserves in the world while the US is rated as having the 11th largest reserves. Venezuela's reserves are 10 x those of the US.
Take a look at the countries with the largest oil reserves and oil producers and many of them are not what you would call democracies. SA, Russia, Iran, etc.
Oh, is that what Biden id doing?
He's trying to stretch our oil supply?
No wonder he got 80 million votes. /S
Just to the south of Venezuela is a small English-speaking nation that actually is pro-American. It is called Guyana. Starting in 2015 there has been oil discovered there, with estimated reserves above 11 billion barrels. On a per capita basis only Kuwait has more oil. Guyana's oil is cleaner than Venezuela's. Guyana is a poor country and needs help with such developement. The problem for them as well as us is that Joe Biden serves at the behest of the extreme climate fanatics. That means Guyana's only hope may be China. For us it means high gas prices for the coming decades.
What nonsense, Guyana doesn't need US government help it has Exxon Mobile, Hess Corp and CNOOC and is producing triple the level of oil that it did earlier this year with a large portion of it headed to Europe.
Guyana oil producers ramp up exports to thirsty European refiners
Your link tells the story. It's the war in the Ukraine that sparked Europe's demand.
From your article:
So, again, why Venezuela and not Guyana?
Well now that most of your comment has been shown to be BS the answer to your question:
I wish that was an answer.
The United States in October 2021 had used its seat on the Inter-American Development Bank (IDB) to veto a proposal from Guyana Shore Based Incorporated (GYSBI) seeking an estimated US$130 million loan to fund its expansion plans to service the oil and gas industry.
Of recent, the issue has been gathering traction again, and, as such, this media house requested a comment, through the US Embassy in Guyana, on the reason for the project being vetoed.
According to the Embassy, the decision to veto the GYSBI proposal is rooted in an existing US policy of prioritising support for renewable energy projects, as opposed to fossil fuel-based ones.
“At the multilateral development banks (MDBs), the United States is committed to supporting developing countries to achieve a clean and sustainable future that is consistent with their development goals and the Paris Agreement’s long-term goals,” this publication was informed.
Then why?
Ahhh how "altruistic".... Are there any Venezuelans left down there? I thought they had all come to the southern border by now.
"Still, a senior U.S. official, speaking anonymously, told the Associated Press the deal was unrelated to efforts to increase the U.S. energy supply, and was not expected to impact oil prices."
The Biden administration is searching for ways to deliver oil and gas to the EU because NATO unity ain't what we've been told. Just remember, it's Putin's fault that the EU allowed itself to become dependent upon Russian oil and gas. Allowing (?) Chevron to pump oil in Venezuela won't benefit the people on the streets of the United States.
Biden is probably also hoping easing sanctions will address the flood of Venezuelan immigrants at the southern border. But that flood likely won't recede until the American economy collapses, again. Don't be surprised if Biden has included a recession in immigration policy planning. The Biden administration has been taking steps to shift recession risks away from the rich and onto the working class. And now Biden can blame the Republican majority in the House.
It may be better to do business with those in our hemisphere instead of the Saudis and their ilk. Money is the carrot. Use it wisely to determine the outcomes you desire.
bin Salman probably thinks this is all pretty funny.
Ultimately the move away from fossil fuels is necessarily incremental. The extreme positions taken by our screwed up political parties are both wrong. We cannot just leap to renewables (flat out impossible) and we cannot continue to exploit the convenience and low cost of fossil fuels (without screwing ourselves climate-wise and compounding energy dependence).
Seems to me the GoP should applaud Biden not taking an extreme position here and backtracking a bit on his earlier moves. What would be the reaction if a GoP PotUS made this move?