The United States contacts Venezuela after a possible embargo on Russia

The United States Contacts Venezuela After a Possible Embargo On Russia

Miami – United States officials secretly traveled to Venezuela this weekend in an attempt to defrost tense relations with Russian President Vladimir Putin’s closest ally in Latin America, an oil country whose reentry into the U.S. energy market could mitigate the economic repercussions of a possible embargo on Russian oil.

At the moment it is unknown what was the result of the talks with the government of President Nicolás Maduro.

The unexpected visit comes after a months-long effort by intermediaries — US lobbyists, Norwegian diplomats and oil company executives — who have asked US President Joe Biden to reassess the “maximum pressure” campaign against Maduro that he inherited from the government. of Donald Trump.

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But the risky idea of ​​contacting Maduro — who is subject to economic sanctions and has been accused in New York of drug trafficking — took on unusual urgency in the wake of the Russian invasion of Ukraine, which threatens to send oil prices skyrocketing. US lawmakers, both Republicans and Democrats, last week began voicing support for the idea of ​​banning oil and natural gas imports from Russia as the next move to sanction Putin for the invasion.

The US delegation was led by Juan González, director of the Western Hemisphere for the National Security Council, revealed two sources informed of the visit and who asked to remain anonymous. González was accompanied by James Story, who was the US ambassador to Caracas when the Trump administration cut ties with Maduro in 2019 and recognized opposition leader Juan Guaidó as the country’s rightful president.

But it was the presence of another State Department official, Roger Carstens, the presidential envoy for hostage affairs, that raised hopes that Maduro might be willing to release American prisoners as a goodwill gesture to the Biden administration.

Carstens had traveled to Caracas in December and met, in jail, with six executives from Citgo, the Houston-based oil company, former Marine Matthew Heath and two former Green Berets arrested in connection with a failed attempt to oust Maduro. launched from neighboring Colombia.

The Biden administration has for some time been considering easing sanctions against Venezuela in exchange for a commitment from Maduro to return to a dialogue with the opposition, which was interrupted last year when an ally of the Venezuelan government He was extradited to the United States on corruption charges, according to a US source who asked to remain anonymous.

One alternative is to allow Chevron, the last remaining US oil company in Venezuela, to increase production or resume exports to refineries in the Gulf of Mexico area capable of processing the thick Venezuelan crude, the official said prior to diplomatic efforts. of the weekend. Under US sanctions, Chevron cannot carry out activities in Venezuela except for basic well maintenance that it operates in conjunction with PDVSA, the Venezuelan oil company.

Maduro has given no indication that he is willing to abandon Putin at this time. He spoke by phone with the Russian president last week in a show of support and attended a rally in Caracas where the Russian ambassador was applauded by members of the ruling socialist party.

“What they are doing against the Russian people is a crime, an economic war,” Maduro declared during the event. “They took them out of the Swift system, they closed their airspace, they closed all their commercial ties, they closed them and they prohibited the use of the dollar. It’s crazy what they’re doing with Russia.”

However, sanctions against Russia and bipartisan support for a full oil embargo pose a threat to Maduro’s ability to maneuver politically as he has done so far.

Russia has emerged as the main buyer of Venezuelan crude oil following US sanctions. Last year, PDVSA sold Russia $2.5 billion worth of crude oil, according to an industry insider who asked to remain anonymous. That is the equivalent of approximately a quarter of all the foreign currency reserves that the South American country has.

While some of those sales were used to pay off debt, more than $1 billion was transferred back to Caracas to cover PDVSA’s operating costs, the industry expert said. Since it has its own accounts in US and European banks frozen, PDVSA receives payments for oil shipments through the Russian bank Promsvyazbank, one of the entities sanctioned by the Biden administration due to its links with the Russian military forces.

It is less clear how the US flexibility would affect gasoline prices. Despite having the world’s largest oil reserves, production in Venezuela fell last year to the lowest level in nearly a century. While production began to recover in late 2021, the 755,000 barrels a day Venezuela said it produced in January represents just a fraction of the more than 10 million barrels a day Russia produced last year.

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