Going around in circles, Biden still asked Maduro for oil. According to the Wall Street Journal, the U.S. Treasury Department has recently issued a licensing order allowing U.S. multinational energy giant Chevron to resume oil extraction operations in Venezuela. After years of sanctions, U.S. sanctions against Latin America's thorn have finally loosened.
Maduro
The Biden administration's licensing order to Chevron comes after the Maduro government and the domestic opposition signed a phased peace agreement in Mexico City. According to the results of negotiations between Maduro's government and the opposition in Mexico City, the $3 billion frozen by Western countries will be transferred back to Venezuela and used for domestic construction, and the two sides will set up a special committee to jointly run the funds. The move amounts to a big step back for Biden and a small step back for Maduro.
Before the Russian-Ukrainian conflict, Europe and the United States had refused to recognize the Maduro government, and more than once instigated color revolutions in Venezuela, and even once called the opposition leader they had installed a "legitimate president." The United States has forged countless bonds with the Maduro government.
Biden
Since 2019, Venezuela has suffered no less sanctions than Russia does today. This time, the United States released the blockade, which is equivalent to recognizing the legal status of the Maduro government in disguise, and at the same time lifting the blockade of Venezuela in the oil field. Of course, it must be pointed out that the United States is actually a last resort choice, but it will objectively promote the development of Venezuela's oil industry.
Venezuela has the world's largest oil reserves. But in stark contrast to the oil-rich Middle East, Venezuela is tinklingly poor. The most important reason for this is that Venezuela's oil extraction technology is backward, and it can only produce low-end petroleum products, and the output is small.
Under the Western blockade, Venezuela's oil extraction technology and equipment have been restricted for a long time
In the 90s of last century, Venezuela's daily oil production used to be more than 3 million barrels, but with the tightening of US sanctions, the withdrawal of oil companies, the lack of mining equipment and technology in Venezuela, empty of black gold, oil daily production gradually shrank to 700,000 barrels per day. With Chevron's return to Venezuela, that will change.
Analysts believe the shift in U.S. policy may signal that other oil companies are also expected to resume operations in Venezuela. If the United States further relaxes the blockade, judging from the current global energy situation, European and American energy companies may quickly rush into the land reclamation, and the Venezuelan oil industry will usher in development.
Dilapidated Venezuelan oil industry
However, judging from the current situation, although the Biden administration has acted, it has many doubts. On the one hand, while the United States agreed to the return of Chevron's joint venture with Venezuela's state-owned oil company PDVSA, it prohibited Venezuelan companies from profiting from sales.
Under a U.S. Treasury license order, all oil drilled in Venezuela will be supplied to the U.S. market, profits will be used to pay off PDVSA's hundreds of millions of debts to Chevron, and the U.S. government requires Chevron to report details of financial operations to ensure transparency.
On the other hand, the U.S. Treasury Department's licensing order is valid for only 6 months and can be revoked at any time. In other words, the Biden administration has put a tight curse on Maduro. The criterion for the mantra is the negotiations between the Maduro government and the opposition and their subsequent implementation.
Maduro
Whether Maduro's tug-of-war with the United States has won the opportunity for Venezuela to develop or made a wedding dress for Biden may depend on subsequent developments, because the biggest obstacle in front of both sides has not been removed.
The West still supports the opposition, and the compromise on oil sanctions is nothing more than to ease the energy crisis and inflation in the United States. If the crisis in the United States is over, it is difficult to say whether the United States will still be so good to talk about. Maduro has achieved a phased victory at best, and there is still a long way to go.