The United States Government has announced the reinstatement of some sanctions on Venezuela’s oil and gas sector, marking the expiration of License 44 which had suspended certain sanctions on Venezuela’s oil sector. The move comes as a response to the slow progress in production over the past six months, with Venezuela still producing around 800,000 barrels per day, below the initial goal of 200,000 barrels per day increase.
Despite the expiration of License 44, American company Chevron, the main oil company operating in Venezuela, will be able to continue working under another authorization, License 41. However, there is uncertainty about the future of this license and the impact on Chevron’s projects in the country.
The reimposition of sanctions is not expected to have a significant effect on Venezuela or the international oil market, according to economist Alejandro Arreaza. He highlighted that Venezuela has become a marginal producer in the international oil market and lacks the capacity to play a significant role, especially in the aftermath of Russia’s war in Ukraine.
The Maduro government has downplayed the effects of the sanctions, with President Maduro stating that the decision is ultimately up to the United States. The expiration of License 44 and the possible implications for Venezuela’s economy remain uncertain, as the country continues to grapple with economic challenges and political tensions.
The reimposition of sanctions on Venezuela’s oil and gas sector raises questions about the future of the country’s oil production and its impact on the international market. As negotiations continue between the US and Venezuela, the outcome remains to be seen.