The United States Office of Foreign Assets Control (OFAC) has eased some sanctions on Venezuela but retained sanctions on PdVSA. OFAC has issued a new license allowing certain transactions related to the export or re-export of liquefied petroleum gas (LPG) to Venezuela until July 8, 2025. However, transactions with Petróleos de Venezuela, S.A., the Venezuelan state-owned oil and natural gas company in which PdVSA has a 50 percent or greater interest, remain prohibited under the sanctions imposed by various executive orders.
The previous general license permitted transactions related to oil or gas sector operations in Venezuela but expired on April 18. The United States holds that Venezuela President Nicolas Maduro and his representatives have failed to fully meet the obligations outlined in the electoral roadmap signed with the opposition in Barbados in October 2023.
Tensions have continued heating between Venezuela and its neighbors. Relations between Argentina and Venezuela have worsened after a diplomatic spat between the two South American nations. Back in March, Argentina accused Venezuela of cutting the power supply to its embassy in Caracas after its diplomats invited Venezuela's opposition leaders due to concerns about "the deterioration of the institutional situation and the acts of harassment and persecution directed against political figures in Venezuela."
In a statement released by the Office of Argentine President Javier Milei, Argentina lamented that the embassy's power was turned off in a "deliberate action that endangers the safety of Argentine diplomatic personnel and Venezuelan citizens under protection."
Tensions between Buenos Aires and Caracas have been simmering after Venezuela's socialist President Nicolás Maduro criticized far-right Milei's election victory in November last year, claiming the "neo-Nazi extreme right" had won power. The situation reached fever pitch a couple of weeks ago after Argentina announced diplomatic actions against Venezuela following Maduro's ban on Argentine-licensed aircraft from accessing Venezuelan airspace.
Venezuela's crude oil production has declined sharply from 3.2 million b/d in 2000 to 735,000 b/d in September 2023 mainly due to sanctions and poor maintenance; in contrast, Argentina's crude output has been increasing with Milei vowing to shake up the system.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More