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US begins to lift sanctions on Venezuela
Kaieteur News – On Monday July 12, the United States Department of Treasury granted a sanctions waiver, which in effect empowers US companies to export or re-export Liquid Petroleum Gas supplies to Venezuela. This sanction waiver is the first move by the Biden administration to ease sanctions on the economically hard-hit country, according to S and P Global Platts, and is “very much driven by humanitarian concerns” according to a source familiar with the matter.
A Venezuelan Oil facility.
A propane shortage in Venezuela has forced thousands to utilise wood stoves for cooking food.
“The US Government is recognising literally the pain of the Venezuelan people,” the source said. “The US Government also must be recognising that not allowing propane to be imported to Venezuela is not going to serve any political purposes.”
The Treasury waiver, called General Licence No. 40, allows LPG exports or re-exports to Venezuela through July 8, 2022. It does not allow the suppliers to receive payment-in-kind of petroleum or petroleum products. According to the source privy to the matter, the waiver also empowers US banks to be able to facilitate the trades, an action which has been wholly banned under Venezuela’s US sanction.
Many commentators posited that President Joe Biden would have moved to ease some sanctions against Venezuela, but the issue has only now been addressed as the administration focused resources on tackling more pressing issues. The next potential Venezuela sanctions waiver might allow diesel-for-crude swaps to resume, analysts say.
Before the trades were banned in late 2020, Indian, Spanish, and Italian refiners supplied diesel needed for power generation and agriculture in exchange for payment in Venezuelan crude. S and P Global Platts Analytics predicts an easing of some sanctions would only return Venezuelan oil production to around 700,000 b/d by the end of 2022, while any major recovery would depend on the removal of US sanctions against state-owned PDVSA.
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