U.S. Wants Venezuelan Oil In Exchange For Sanction Relief

• Reuters: Washington wants Venezuela to commit part of crude exports to U.S. refineries in exchange for sanction relief.
• The United States broke off diplomatic relations with Venezuela in 2019.
• Now that Washington is seeking a policy reversal, some believe it may be too late.

The United States wants Venezuela to commit at least part of its oil exports to U.S. refineries as a condition for Washington to consider providing sanction relief to the South American nation, Reuters has reported, citing unnamed sources in the know.

The report comes days after the U.S. sent a delegation to Caracas to reportedly seek support for its sanctions against Russia in a bid to increase Russia's isolation, including from friendly countries such as Venezuela.

The subject of the talks that the two sides held in Caracas was not disclosed, but it was reported that they did not end with an agreement of any kind. Seeing as the U.S. has been planning a ban on Russian oil imports for a while now, it would be safe to say that the topic of replacing those with Venezuelan crude may have been on the table.

Now, the Reuters sources say that American diplomats have told the Venezuelan side that Washington might relax sanctions—but only if Caracas starts delivering crude directing to the United States.

The United States broke off diplomatic relations with Venezuela in 2019 after national elections that cemented Nicolas Maduro as president. Sanctions followed, targeting specifically Venezuela's oil industry—the lifeblood of the regime.

However, Washington could not completely stop Venezuelan oil exports despite deepening sanctions, with China and Russia coming to the rescue. Venezuela continues to export most of its oil to China.

Now that Washington is seeking a policy reversal, some believe it may be too late. The sanctions have added to years of mismanagement in the Venezuelan oil industry to reduce the country's output severely. As the Wall Street Journal reported this week after the news of the talks, Venezuelan oil may simply be insufficient in volume to replace the crude and oil products the U.S. was importing from Russia.

By Charles Kennedy for Oilprice.com

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