Chevron's Return to Venezuela Signals US Shift

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Negotiations between Venezuelan President Nicolas Maduro and the opposition Unity Platform gave way to an incremental relaxation of US oil sanctions against the Opec country, with the US agreeing on Nov. 26 to allow US major Chevron to restart its operations. The move is just a first step towards normalizing Venezuela’s oil trade, but it could mark an important shift in US policy. The Biden administration says more sanctions relief could come if Venezuela takes the right political steps, but the path ahead looks long and difficult. On its own, the license is not enough to reverse the dramatic declines in the former oil giant, where a combination of underinvestment, mismanagement and sanctions has seen crude output fall from 3.3 million barrels per day in 1997 to somewhere around 600,000-700,000 b/d today. The US is “open to further calibrating our sanctions, but any additional action will require additional concrete steps by Venezuela” in the political process, a senior administration official said. Progress could include the Maduro government reaching agreement with the opposition on the electoral calendar, reinstatement of candidates, the return of political parties, allowing for international electoral observers, or updating the electoral registry, the US official said.

Sanctions, Oil Supply, Majors
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