A high-level US delegation visits Venezuela to propose energy agreements

A high-level delegation from the US government traveled to Caracas this Saturday with the intention of proposing an economic agreement to Nicolás Maduro to meet some energy demands in its economy, after the imposition of sanctions on Russia for invading Ukraine. The information, without official confirmation, has been published by The New York Times.

The initiative would contemplate the introduction of measures to relax international sanctions on Venezuela, giving Caracas, in addition, options to recover its oil production in a global context of volatility and record barrel prices. With the tempting initiative, the United States moves its chips to try to mitigate Russia’s geopolitical influence among its Latin American allies. Venezuela did not participate in the vote on a resolution condemning Russia at the UN Extraordinary General Assembly.

The supposed trip of the US delegation has been received with secrecy in Caracas. Sources close to the negotiation, however, assume that the talks are ongoing. Other sources with access to the US embassy in Caracas have confirmed the official visit, although stating that the objective of the delegation – the highest level in a long time – would be to discuss the possible release of US political prisoners in Venezuela, including the six managers of the Citgo subsidiary, Venezuela’s oil subsidiary in the US The Venezuelan opposition is totally secretive about the news.

The US market was the traditional destination for Venezuelan oil exports before Hugo Chávez came to power in 1999. Washington broke relations and closed its embassy in Caracas in 2019, after accusing Nicolás Maduro of electoral fraud. The Donald Trump Administration imposed harsh sanctions on the Chavista regime and recognized the opposition Juan Guaidó as president of the country.

Francisco Monaldi, an economist specializing in oil and an international consultant, explains that the influence of Venezuela’s oil production on the international market — some 800,000 daily — is modest. “In the short term, it will be difficult for Venezuela to sustainably maintain the production of one million barrels per day,” he says. “The production scales of Russia and Venezuela are incomparable; there is no expert capable of sustaining that Venezuela will have an influence in the energy market in the next six months.”

The agreement may make sense, according to Monaldi, in the medium term: the end of international sanctions could offer Venezuela the possibility of increasing its current production. The Venezuelan government seems determined to change the institutional investment framework to encourage private participation in its deposits, which are the most abundant in reserves in the world.

“Right now, the United States is especially interested in supplying some 500,000 barrels a day of heavy crude oil and derivatives that Russia had been selling to it, for its refineries in the Gulf of Mexico, and that Venezuela produced years ago,” Monaldi recalls, while stressing that none of These factors will resolve, by themselves, the increase in fuel prices.

During the presidency of Donald Trump, while Maduro consolidated his autocracy and Washington responded with sanctions, Caracas has sent numerous conciliatory messages to the White House proposing agreements on energy matters with investment facilities, which also mean the end of sanctions. After denying the crisis for years, the official discourse today blames international sanctions for the collapse of the economy.

But at the same time, in the last two years, Venezuela has reinforced its alliance with Moscow, with a very outstanding chapter in the military field. Maduro has expressly justified and supported the Russian invasion of Ukraine. Venezuela did not participate in the vote on a condemnation resolution adopted on Wednesday by the UN Extraordinary General Assembly.

An anonymous source linked to the private sector of local oil production points out that, with this initiative, the Biden Administration can offer Caracas the lifting of sanctions, or significantly reduce them, in exchange for Maduro organizing an election. clean and verifiable in 2024 that would mark the beginning of the end of bilateral tensions.

But Diosdado Cabello, number two in the regime, recently reiterated that “it is not known” when the presidential elections will be held in Venezuela, arguing that the harassment of the United States and the European Union against the regime makes it very difficult.

After learning of the existence of the negotiations, US Republican Senator Marco Rubio declared that “Biden is using the excuse of Russia to propose the agreement that he always wanted to make to Maduro. Instead of producing more local oil, they want to replace the oil he compared to a murderous dictator [Putin]buying another dictator and murderer [Maduro]”.

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