After the escalation of the Russian-Ukrainian conflict, the United States has banned the import of Russian energy, but this has made domestic oil prices continue to rise. Against this backdrop, the Biden administration has found Venezuela, and the previously tense relationship between the two sides has shown signs of further loosening.
Comprehensive "Wall Street Journal" and Reuters reported on the 9th, informed sources revealed that US officials proposed to let Venezuela directly export oil to the United States in exchange for relaxing US oil sanctions against Venezuela. The two sides also discussed Venezuelan-Russian relations, as well as Venezuela's domestic politics. Although there was "no progress" in the talks, the two sides agreed to further negotiations.
On the 9th, the White House issued a statement saying that Venezuela released two arrested Americans. Venezuelan President Nicolas Maduro said the U.S. and Venezuelan flags were "beautiful to put together." However, the Biden administration's move to find the Maduro government has been scolded by many domestic voices.
Maduro confirmed contact with the US government on the 7th Venezuelan president news official Twitter map
People familiar with the matter: The talks between the two sides have not yet progressed
Reuters reported on the 8th that since the escalation of the situation in Russia and Ukraine, the US diplomatic department has been looking for energy supplies around the world to make up for the impact of sanctions and war on Russia's oil and gas exports. On the 5th, US officials met with Maduro in Caracas, the capital of Venezuela, which was the first bilateral meeting between the two sides in many years.
People familiar with the matter told Reuters that U.S. officials made it clear that their top priority was securing U.S. oil supplies. The U.S. eased oil sanctions on the condition that Venezuela ship oil directly to the United States.
The U.S. imposed sanctions on Venezuela's national oil company as early as early 2019 to restrict its oil sales, cutting off the company's oil exports to its main destination, the United States. Subsequently, the Trump administration imposed several more rounds of sanctions on it. Venezuela has a lot of oil, but its refining capacity is poor, and the diluent used to dilute heavy oil is an important point of the US sanctions. But in recent years, with the help of countries like Iran, Venezuela's oil industry has picked up.
Reuters said that if the United States and the Maduro government reach an agreement, the US energy company Chevron may become the first beneficiary. Chevron, the last U.S. oil producer still operating in Venezuela, has a special license that allows it to maintain extremely low levels of operations in Venezuela to ensure the maintenance and safety of the facility.
On the 8th, at the Chevron gas station in San Diego, California, the United States, the U.S. oil price continues to rise Twitter chart
With the license due to expire in June, Chevron has sought authorization from the U.S. Treasury Department to trade Venezuelan oil cargoes to pay off its debts by amending the exemption clause. Chevron wants a revised license so it can recover hundreds of millions of dollars in unpaid debt and delayed dividends from its joint venture with Venezuela's National Petroleum Company (PDVSA).
Chevron could partially resume production in Venezuela and resume exports to itself and other U.S. Gulf Coast refineries to replace Russian oil, a source said.
Before the sanctions, U.S. Valero Energy, Citrogo Oil, Chevron and PBF Energy were major buyers of Venezuelan oil.
But chevron, the U.S. State Department and Venezuelan Oil Company did not comment on the news.
Sources quoted by Reuters revealed that there was little progress in talks between Venezuela and the United States over the weekend. The United States has tried to assess the need to break Maduro out of his "alliance" with Russia. But both sides agreed to further negotiations.
But the most pressing issue is the topic of energy. Sources said the two sides discussed a workaround to return Venezuelan oil to markets hit by Russian supply disruptions and to give the Venezuelan national oil company temporary access to international bank transfers.
On March 8, local time, US President Biden officially signed an executive order prohibiting the United States from importing energy from Russia. According to the American Automobile Association, the average gasoline price in the United States hit an all-time high of $4.17 per gallon on the day. The market expects gasoline prices to continue to rise.
Previously, Russian oil exports could reach 7 million barrels per day, which has an irreplaceable position in the global crude oil market. To ease the supply shortage, Biden has ordered the release of 30 million barrels of oil from the U.S. Strategic Petroleum Reserve, and other U.S. allies have released strategic reserves to stabilize global oil prices.
The White House says Venezuela has released two Americans, Maduro: The talks were very diplomatic
The White House issued a Statement on March 9 saying Venezuela had released two Detained Americans. One of them is Gustavo Cárdenas, an executive at Certego, a U.S. refining subsidiary of Venezuela's national oil company, who was arrested in 2017. The other was Jorge Fernandez, who was arrested last year but did not provide further details.
Venezuela also gave signs of loosening. Maduro announced on Monday (7th) that the Venezuelan government will restart negotiations with the US-backed opposition to restore democratic rights in Venezuela. "We have decided to restart the process of national dialogue," he said on state television on Monday night. "This dialogue should provide all the political guarantees for the coming years."
The weekend talks between the United States and Venezuela did not give a public settlement plan. But Maduro said the talks were "respectful, sincere and very diplomatic."
"The flags of the United States and Venezuela are placed together, and they look beautiful, which is as it should be." Maduro said.
According to people familiar with the matter quoted by the Wall Street Journal, the meeting between the United States and Venezuela was a decision to separate Russia from his "closest allies" in South America, while looking for opportunities for U.S. oil companies in Venezuela. In recent years, many U.S. oil companies have left Venezuela. Venezuela, for its part, has long said it wants to rejoin the world financial system cut off by sanctions and wants U.S. prosecutors to drop indictments against Venezuelan government officials.
Cnus de Venezuela Infographic
On a trip to Venezuela on March 7, White House spokesman Psaki said: "The purpose of the visit by government officials is to discuss a range of issues, including, of course, energy supply, energy security, but also discussing the health and well-being of detained U.S. citizens." ”
Psaki declined to comment on whether it's worth restoring the U.S.-Venezuelan relationship that was largely broken after 2019 in order to increase oil supplies, saying: "I think this [about the resumption of relations between the United States] skips a few stages." ”
Despite insisting that the visit was only intended to free U.S. citizens, the visit sparked criticism in the United States, with the Washington Post criticizing the possibility of a warming relationship between the Biden and Maduro administrations as a sign of how global relations and values were disrupted during the Russian-Ukrainian conflict. The Washington Post said the ICC was conducting an "investigation into crimes against humanity" against the Maduro regime.
The Biden administration also faces opposition from allies on Capitol Hill. Later on the 7th, Senator Robert Menendez, Democrat of New Jersey, chairman of the Senate Foreign Relations Committee, urged the White House not to move forward with any form of agreement.
Menendez said in a statement: "We should not breathe new life into Maduro's rule. The Biden administration's efforts to unite the world against Moscow should not be weakened by its support for Venezuela. ”
In addition to these criticisms, some media believe that Venezuela's crude oil production cannot increase rapidly, which has a direct impact on oil prices.
Scott Modell, managing director of Rapidan Energy, said: "Considering the extremely high oil prices, I think this visit to Venezuela is natural. Venezuela exports between 400,000 and 500,000 barrels of oil a day to the United States before the sanctions. In the best-case scenario, he said, that production could increase to 600,000 to 1 million barrels per day in three months or so. I don't think it will have much effect even if Venezuela increases its oil production. ”
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