Need to Know

November 27, 2023

Rapprochement

Venezuela

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As post-pandemic inflation gripped the global economy and Russia’s invasion of Ukraine caused energy costs to spike, the United States sought to expand the oil available on world markets by easing sanctions on oil-rich Venezuela.

The sanctions date from 2005, when the US slapped them on the South American country for “criminal, antidemocratic, and/or corrupt actions,” explained the Congressional Research Service. They intensified after President Nicolás Maduro won reelection in 2018 in shady circumstances.

The sanctions failed to create conditions that resulted in Maduro’s ousting, however. They also helped undermine the Venezuelan economy, leading around seven million people, or a quarter of the population, to flee to other countries in search of opportunities. Hunger is a perennial problem in the country, wrote Venezuelan political scientist Carlos Villamizar in the Boston Globe.

Now, under a deal reached in October, the US lifted sanctions on Venezuela’s oil, gas, and gold industries in exchange for Maduro holding free and fair elections in 2024 when Venezuelans vote for a new president, the Washington Post reported. But the US didn’t rescind all its sanctions, and the European Union is also maintaining sanctions against the country, added Agence France-Presse.

The oil industry was ecstatic, the Economist reported. About a month after the deal was announced, Reuters wrote about how Venezuela was planning on allowing the United Kingdom-based oil company Shell and the National Gas Company of Trinidad and Tobago to develop an offshore natural gas field, securing a vital source of revenue for the impoverished country.

American leaders have made clear that they will reimpose the sanctions if Maduro reneges on his promise to draft a roadmap for fair elections, noted Bloomberg. Venezuelan leaders, in turn, have said they won’t accept American ultimatums.

Already, the Americans have reason to be worried. Maduro’s administration recently banned Maria Corina Machado, a popular opposition leader, from standing for the presidency in next year’s election, according to National Public Radio.

A proponent of free markets in a country where socialists like Maduro and his mentor, the late Hugo Chávez, hold sway, Machado was banned from office due to alleged “fraud and tax violations,” wrote the Christian Science Monitor. Maduro also alleged that she supported the American sanctions.

Machado, meanwhile, has pledged to ignore the ban and keep running. She won a recent opposition primary vote, for instance, that took place outside of the government regulations. Party members organized polling stations in homes, parks, and offices, the New York Times reported.

Oil revenues sure would help Machado make things right.

This story originally appeared in the November 27, 2023 newsletter, Rapprochement.