Nicolas Maduro, president of Venezuela, waits to receive the new Colombian ambassador to Venezuela at the Miraflores presidential palace in Caracas, Venezuela on 16 August 2023. The Biden administration is in negotiations with Venezuela about temporarily eliminating punishing sanctions in exchange for a vow to host fair elections next year. PEDRO RANCES MATTEY/GETTY IMAGES
The Biden administration is engaged in talks with Venezuela, exploring the possibility of a temporary lifting of crippling sanctions in exchange for a commitment to hold fair elections next year.
Preliminary discussions have commenced, with senior officials from both the U.S. and Venezuela involved in the negotiation process. Sources familiar with the matter who requested anonymity informed Bloomberg about the ongoing talks, according to a Wednesday report.
As Venezuela faces economic and humanitarian crises, the U.S. has floated the idea of sanctions relief in exchange for President Nicolás Maduro‘s pledge to hold competitive presidential elections in 2024 and release political prisoners. While sanctions have impacted Venezuela’s oil sales, their original goal of removing Maduro from power remained unfulfilled.
As Maduro’s government faces scrutiny for its undemocratic actions, including barring opposition candidates, the timeline for an agreement remains uncertain. The spokesperson for the White House’s National Security Council, Adrienne Watson, stated that sanctions relief could follow concrete steps toward restoring democracy and ensuring free and fair elections.
Venezuela holds a significant position in the global oil market. According to the Energy Information Administration, the country boasts the highest proven reserves of crude oil, totaling a substantial 303,806 barrels. Similar estimates are provided by the OPEC and BP.
Yet the nation’s oil production has seen a dramatic decline, plummeting from nearly 3 million barrels a day before 2015 to just 730,000 barrels a day last year. This decline, coupled with the oil embargo and hyperinflation, has led to a marked contraction of Venezuela’s gross domestic product (GDP) by nearly two-thirds, settling at around $110 billion last year.
Crude oil fell over 1% on Wednesday, on track for the third straight daily decline, with a barrel of WTI-grade crude trading at $78.75. The United States Oil Fund ETF (NYSE:USO) was 1.02% lower to $68.70 and the Energy Select Sector SPDR Fund (NYSE:XLE) fell 0.5%, underperforming all other S&P 500 sectors.
Produced in association with Benzinga
Get news, handpicked just for you, in your box.