US Intensification of Sanctions Against Venezuela is Fraught With Obstacles

By Misión Verdad – Dec 3, 2024

Last week, articles in two highly influential US publications, the Wall Street Journal (WSJ) and Foreign Affairs, highlighted key movements within the US political and economic spectrum regarding Venezuela. Both articles outlined how certain sectors are promoting a more pragmatic approach towards Venezuela for Donald Trump’s new presidential term in 2025.

The articles, published on November 28—one written by WSJ correspondent Kejal Vyas and the other by Venezuelan economist Francisco Rodríguez—agree that the “maximum pressure” strategy implemented during Trump’s first term was a failure not only for failing to achieve the sought-after “regime change” but also for its repercussions in the region, especially in terms of migration and energy instability.

“A return to that failed strategy would be a grave mistake. Sanctions rarely achieve regime change,” noted Rodríguez, a Venezuelan opposition-aligned economist, in his opinion piece for Foreign Affairs. In similar terms, former diplomat Thomas Shannon wrote in the WSJ: “The challenge is how to detach from an approach that failed to bring about political changes in the country, impoverished more people, and accelerated the migration of millions of Venezuelans.”

Although Trump’s agenda towards Venezuela remains uncertain, the recent statements by the former president and the appointment of Marco Rubio to the position of US secretary of state point to a scenario marked by tensions and hostility rather than a pragmatic approach.

In this context, for months the US oil sector has intensified its efforts in Washington to moderate the illegal economic coercive measures—euphemistically referred to as “sanctions”—affecting the Venezuelan petroleum sector. Among the most notable moves are:

July 2024: Just days before the elections in Venezuela, executives of US oil companies expressed their preference for the continuity of President Nicolás Maduro’s government, considered as a guarantee to protect their investments.
November 2024: Leaks revealed that lobbyists from the oil sector are urging Trump to abandon the “maximum pressure” policy and negotiate a deal: “More oil, fewer migrants.

These approaches reflect a certain sense of urgency to ensure the performance of US investments in Venezuela and maintain a sustained flow of Venezuelan oil, given Caracas’ strategic position in the global energy market and the varied portfolio of products it offers.

In summary, it is becoming increasingly evident that a resistance front has developed within the US energy sector, advocating for the continuity and expansion of the licensing scheme granted to foreign companies to operate with Venezuela, which not only benefits the companies in question but also the end user by ensuring constant access to important products such as high-quality asphalt.

Reversing these exceptions could destabilize the US domestic energy market, increase operating costs, and create uncertainty for investors.

World Street Journal Report: Trump Under Pressure to Reconsider Stance on Venezuela

Venezuela’s place in Trump’s energy policy
Despite the weight and influence of the oil lobby, there is significant resistance from other political and business sectors that advocate for maintaining, or even tightening, sanctions against Venezuela. These demands largely stem from factions aligned with a confrontational political vision in which any easing is interpreted as a defeat of the United States against Venezuela.

A case in point is US Democrat Senator Dick Durbin, who has repeatedly promoted resolutions prohibiting the purchase of Venezuelan oil even after the presidential elections in Venezuela. “I’ve introduced a bill to terminate all US petroleum cooperation and related oil-trade with Venezuela until the legitimate results of their recent election is respected,” Durbin wrote on his X account.

It is notable that congress members representing states with oil activities often favor market quotas for domestic production, as they seek to protect their industry from the competition posed by foreign crude imports. This is evident in Durbin’s stance, as he represents the oil-producing state of Illinois, whose crude is primarily processed in one of the refineries operated by PDVSA subsidiary CITGO, illegally confiscated by the United States.

The next US president has promised to reduce US dependency on foreign oil and, therefore, may implement measures that would lead to an increase in domestic oil and gas production in the United States. “The policy will be one of abundance, independence, and even energy dominance. We have more liquid gold beneath our feet than any other country,” Trump declared during the height of his electoral campaign.

Moreover, the Republican magnate cultivated a close relationship with the energy sector, securing significant contributions from its entire value chain. This support came not only from production companies but also from service, refining, and distribution companies, which demonstrates the commitment of major investors in the sector to the new administration.

Meanwhile, last week, a shipment of Venezuelan asphalt, administered by Global Oil Terminals under General License 40A, arrived at the port of Palm Beach.

How do these pieces fit into Trump’s policy on this sector? The proclaimed independence from foreign resources, the interests of the energy sector, and Venezuelan oil converge at a central point: the system of illegal sanctions, which acts as a platform to execute these objectives in a strategic and illegal manner.

Regarding the shipment of asphalt, Harry Sargeant IV, the president of US-based Global Oil Terminals, emphasized that it is undeniable that the renewed flow of high-quality, low-cost Venezuelan asphalt to the United States has benefited the US taxpayer.

He added that it has dealt a blow to strategic competitors of the US since, under the sanctions, “those barrels become low-cost fuel that simply subsidized the Chinese economy.”

Such an approach was also expressed months ago by Brian Nichols, US assistant secretary of state for Western Hemisphere affairs, who noted that the licenses have moved oil trade into the formal sector. According to him, this prevents the product from going to China or Iran, and he concluded that “it is better for American [sic] consumers because we receive the products that we need.”

On one hand, Trump promises to strengthen domestic crude oil production to achieve energy independence, and, in parallel, lobbyists have found in licenses a strategic opportunity to import specific products such as Venezuelan asphalt.

This situation highlights an ambiguous stance: while there is no intention to strengthen direct oil trade between the US and Venezuela, the exceptions represented by these licenses allow for balancing internal, business, and regional interests.

For example, Venezuelan asphalt, essential for maintaining the road network in the United States, is traded under favorable terms, taking advantage of discounts on barrels that allow companies such as Global Oil Terminals to generate significant profit margins.

These specific licenses, granted under strict conditions, create a model in which companies operate in a regulated but economically profitable environment. For its part, the Venezuelan government takes advantage of these revenues, which have generated economic stability in an adverse situation, to counteract the impact of the sanctions regime imposed since 2014.

The preservation of the licenses granted for operations in Venezuela not only adheres to criteria of calculated ambiguity but also reflects the resistance of key business sectors to a potential return to the “maximum pressure” approach.

These sectors have found in the licensing administration scheme an attractive and highly profitable formula that allows them to protect and expand their investments. Their stance, based on stability and predictability, clashes with the political currents that advocate for tightening the pressure against Venezuela.

Ultimately, the current landscape reflects a complex web of conflicting interests surrounding Venezuelan oil and its place in Trump’s energy policy, issues that reveal a strategic dynamic intending to balance internal demands and reduce regional tensions.

The major companies direct their preferences towards a predictable and favorable environment for their activities in Venezuela, with President Nicolás Maduro at the helm, as a US oil magnate stated last July: “My recommendation is to work with this guy [Nicolás Maduro] for six more years.”

(Misión Verdad)

Translation: Orinoco Tribune

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