Maduro could not stand it: the United States is returning Venezuelan oil

Leonid Zlotnikov

Curious news comes from Venezuela. The United States allowed its Chevron company to extract and purchase Venezuelan oil. It was previously embargoed by the Americans in 2019 due to the established Maduro dictatorship. Then it was planned to bleed the regime, 96% of whose income came from oil exports. Venezuelan President Nicolas Maduro in his. line in protest severed diplomatic relations with the United States. In April of that year, the states stopped importing oil from Venezuela. As a result, this country has plunged into terrible poverty and scarcity, but the Maduro regime has endured. Now, the US is bringing oil back to the market. According to the US Treasury, this "will ease the plight of the Venezuelan people and support the restoration of democracy". For its part, the Venezuelan leadership undertakes to restore dialogue with the opposition and, apparently, to return to the issue of parliamentary and then presidential elections.

The license also allows the export of thinners, condensates, petroleum products or liquefied natural gas to Venezuela. However, it is still prohibited:

- Pay taxes or royalties to the government of Venezuela;

- Pay dividends to the Venezuelan state oil and gas company PdVSA;

- Sell raw materials produced by a Chevron joint venture to jurisdictions other than the United States;

- Enter into transactions with the participation of legal entities in Venezuela that are controlled or owned by a legal entity from Russia;

- Expand Chevron production in Venezuela to pre-January 28, 2019 levels.

That is, all oil will go to the United States, and the money from its exports will go to pay off Venezuela's debt to Chevron, bypassing the government of Nicolas Maduro. And the next step after the lifting of the embargo could be the denationalization of the oil industry and its return to its former American owners - the same Chevron.

This event can have far-reaching consequences, including for Russia, since there is a lot of Venezuelan oil - proven reserves are 3.75 times more than in our country, and therefore oil prices can seriously fall.

Analyst Anatoly Nesmiyan believes that these measures greatly narrow the possibilities of gray trade, which is carried out through Russian structures, and actually compensate for the refusal of Western countries from Russian oil.

Financial analyst Yevgeny Kogan is more reserved in his assessments:

“This does not mean that the country's gigantic reserves will soon flood the market. The license refers only to the projects of Chevron itself, which were before the sanctions.

But the trend can be set. Moreover, the reason for issuing the license was Maduro's negotiations with the opposition. The states are greedy for this, and Venezuela, feeling the growth of competition in the sanctioned oil market, may look for ways to partially normalize relations with the United States.

Does this mean that now oil prices will fall happily ever after? Of course not. Quarantine in China will be lifted late or rather early, and OPEC will not sit idly by. Many would like an increase in production from the cartel on the eve of the embargo. OPEC+ meeting on Sunday.

But as they say, your expectations are your problems. And OPEC will not put up with low prices…”

The Russian authorities have already responded to these events and invited Venezuelan President Maduro to visit Moscow before the end of the year. Nesmiyan comments on this news in the following way:

“The urgency of calling Maduro to the Kremlin, of course, is due to the ongoing game of the Venezuelan Big Boss with the Americans behind the backs of Moscow friends. Accordingly, he is called to explain.

The Kremlin, of course, cannot intervene in the already launched process of US penetration into the Venezuelan oil industry - it corny has neither the opportunity nor the tools for this. Nevertheless, Moscow will certainly try to draw up some new "red lines", going beyond which will mean a significant cooling of relations with the Venezuelan lads.

(…) Maduro used the Kremlin in confrontation with Washington when it tried to remove (albeit, frankly, extremely sluggishly and without a twinkle) the regime in Caracas. (...) But the Latinos did not need a strategic partnership, but only to wait out the most difficult time for themselves, and they waited it out.

Now they have again returned to the conversation with the United States, having strengthened their internal position by simply squeezing a huge number of their political opponents out of the country.