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US Set to Renew Venezuela Oil Sanctions After Presidential Candidate Barred

(Bloomberg) -- The Biden administration will restore sanctions on Venezuela’s energy sector if the country upholds its ban on an opposition candidate from running for president, two US officials said, a move that risks chilling recent efforts to improve ties between the two adversaries.

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The US will allow a six-month suspension on sanctions to expire in April if opposition candidate María Corina Machado is barred from running, and is also considering additional measures, according to the officials, who asked not to be identified discussing private deliberations.

“They need to make the right decisions here and allow opposition members to run for office and release the political prisoners that they’re holding right now,” National Security Council spokesperson John Kirby said during a Monday briefing. “They’ve got decisions they have to make before we weigh what decisions we’ll take” by April, he said.

The move — which follows a decision last week by the country’s top court to uphold the ban against her, as well as the jailing of some of her aides — would come as a surprise to many analysts following the thaw in relations, who had seen reversing the sanctions to be a severe response.

Read More: US Unlikely to Return All Venezuela Sanctions After Ruling

The Biden administration had issued a license in October authorizing oil and gas sector transactions in Venezuela as a gesture of goodwill after President Nicolas Maduro’s government entered talks with some members of the opposition.

A spokesperson for the White House National Security Council said in a separate statement Monday that unless Maduro and his representatives get back on track, specifically allowing all presidential candidates to compete in this year’s election, the US will not be in a position to renew that license when it comes up for renewal in April.

The Treasury Department didn’t immediately comment.

Waiting until April to restore the sanctions would give time for the US to negotiate with the Maduro regime and the opposition to find a way to get Machado on the ballot.

Read More: Venezuela Oil, Bond Sanctions Eased in US Bet on Free Elections

Earlier on Monday, Venezuela’s National Assembly President and Maduro ally, Jorge Rodríguez, said the government had accepted an invitation from Norwegian mediators to meet with the political opposition to give the agreement reached in October “another try.”

Oil prices were little changed after the development was reported. Government notes due in 2027 slid 2.2 cents on the dollar to 19.18 cents, according to traders and indicative price data compiled by Bloomberg. Bonds on the state oil company, PDVSA, due in 2026 dropped one cent.

Read More: Venezuela Bonds Extend Drop as US Threatens to Renew Sanctions

--With assistance from Nicolle Yapur and Akayla Gardner.

(Updates starting with comments from the National Security Council spokesperson in the third paragraph)

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