Venezuela’s Maduro Hails ‘New Era’ as US Lifts Sanctions

Washington has suspended sanctions on Venezuelan oil, gas and gold production after four years and lifted some restrictions on bond trading

Nicolás Maduro, President of Venezuela, during an event in the Palacio de Miraflores official residence in Caracas in August 2023. Photographer: Carlos Becerra/Bloomberg
By Eric Martin - Fabiola Zerpa - Patricia Laya
October 19, 2023 | 02:00 AM

The US government has suspended sanctions on Venezuelan oil, gas and gold production after four years and lifted some restrictions on bond trading, expressing confidence that President Nicolás Maduro is ready to take on all challengers in an open election next year.

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In a gesture of goodwill after Maduro’s government entered talks with some members of the opposition, the US Treasury Department said Wednesday it issued a six-month license authorizing transactions involving the oil and gas sector in Venezuela. It also authorized dealings with Minerven, the Venezuelan state-owned gold mining company, and lifted a ban on secondary trading of some Venezuelan sovereign bonds and debt and equity issued by the state oil company Petroleos de Venezuela SA.

The moves are a calculated gamble by the US that Maduro, a long-time vocal critic of US policy who has brutally repressed protests against his 10-year rule, is ready to change his ways after the sanctions further crippled his country’s economy, hastening the exodus of millions of its citizens in search of opportunity.

“We’re in the presence of a new era for Venezuela,” Maduro said on state TV on Wednesday evening. “We are ready for a new era with the US, of respect, equality and advancement.”


The measures are a nod to the political agreement signed by the Maduro government with a faction of the opposition in Barbados on Tuesday. They’re “consistent with U.S. sanctions policy, in response to these democratic developments,” the Treasury said in a statement.

As part of the agreement, the US expects Venezuela to restore by November the political rights of all candidates that have been banned from participating in next year’s presidential elections, according to US administration officials. That includes Maria Corina Machado, considered the frontrunner ahead of Sunday’s primaries, they added.

The US “is prepared to amend or revoke authorizations at any time, should representatives of Maduro fail to follow through on their commitments,” the Treasury added in the statement. “All other restrictions imposed by the US on Venezuela remain in place.”


Still, Machado’s candidacy is no sure thing — she’s currently banned from holding office because of allegations she sought to undermine the regime. If she’s not allowed to run, the US will be in the awkward position of having to decide whether to impose sanctions again.

Earlier this week Maduro said he would “not endorse irregularities” in negotiations with the opposition and made veiled references that Machado would not be able to participate.

Venezuela’s oil exports to the US were halted in early 2019 when the Treasury imposed sanctions on PDVSA, as the oil company is known. Back then, Venezuela exported nearly 365,000 barrels a day from its ports to the US, twice as much as in September.

“This will have broad positive economic consequences for Venezuela because they imply the return of Venezuela to the oil market, even if gradually,” said Michael Penfold, a professor at the Institute of Advanced Studies in Administration in Caracas. “The expectation was that they were going to issue special licenses, and we are seeing a very broad license in response.”


Today’s measures should result in an immediate increase of crude oil exports from Venezuela to the US, and of US petroleum products to Venezuela, said Fernando Ferreira, director of geopolitical risk at Rapidan Energy Advisors.

“We have also seen quite a bit of interest from oil companies in Venezuela, so I wouldn’t be surprised to see an increase in activity and production in the coming months,” Ferreira said.

Vice President Delcy Rodríguez said the license allows Venezuela’s Central Bank and another state bank to carry out and receive oil-related payments.


Trading ban

The ban on trading of Venezuelan debt also came into effect in 2019, under former President Donald Trump’s administration.

The two licenses removing a ban on the secondary trading of Venezuelan both sovereign and PDVSA bonds will allow individuals and institutions based in the US to buy the country’s government and oil bonds on the secondary market. They had been limited to only selling the securities.

Earlier on Wednesday, defaulted government and state oil company bonds were trading higher following the announcement of the deal struck between the government and the opposition in Barbados. PDVSA notes maturing in 2026 rose to levels not seen since June 2022.