US eyeing Venezuela for crude without plans for sanction relief

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The Biden administration is eyeing Venezuela for its vast reserves of crude oil as an additional source for the valuable resource in light of surging fuel prices in the United States. However, Washington does not intend to blanket lift the sanctions imposed on the Latin American country, sources told Russian news agency Sputnik on Friday.

The United States wants to lower gasoline prices for domestic consumers after the Organization of Petroleum Exporting Countries (OPEC+) made cuts in its production line in a bid to stabilize the global market.

OPEC+ members voted on cutting their production of oil by 2 million barrels a day in light of the world's surging energy crisis.

The US is concerned that OPEC's probable decision to reduce oil production will pose serious problems for the country and may even be interpreted as a hostile act, according to a US Treasury report.

According to people familiar with the matter, the United States does not intend to offer Venezuela any sanction relief, though the country making a shift in its policy toward the private sector might allow it to recover the debt owed by Venezuelan state-owned oil company PDVSA, which seems like a step in a direction President Nicolas Maduro is willing to take.

PDVSA stopped paying creditors in 2017 after the US imposed harsh sanctions on it as part of its sanction regime on Venezuela and its people.

Meanwhile, Washington is concerned about the dependence Venezuelan refineries developed on Iranian heavy crude, especially El Palito. Iran has in the past six months exported 6.8 million barrels of its heavy crude to Venezuela's refineries.

Iranian Oil Minister Jawad Owji announced last month that the Islamic Republic launched its first overseas Iranian-built refinery in Venezuela, El Palito, which has a capacity of refining 100,000 barrels of Venezuelan crude per day.

Iran and Venezuela have managed to withstand economic pressure from the United States and have closely cooperated to offset the impact of illegal sanctions, particularly those targeting their energy sectors.

Back in June, during a visit to Tehran, Venezuelan President Nicolas Maduro announced the signing of a 20-year cooperation plan with Iran to expand joint cooperation in various sectors, such as oil, banking, and economics. 

If the US were to adjust its policy on Venezuela, that would allow Caracas to import a diluent supply for heavier oil production from the US Gulf Coast, causing a schism to grow between Iran and Venezuela while increasing the transparency of all shipments of that kind, sources added to Sputnik.

There are reports about warming ties between Caracas and Washington amid talk about the opposition in Venezuela getting ready to oust Juan Guaido, a US-installed "interim president" placed in position by a coup, and the United States indicating that it would not interfere if that were to happen.

The parties which backed the decision are Primero Justicia, Accion Democratica, and Un Nuevo Tiempo. 

Last December, one of Venezuela's opposition leaders called for the termination of the country's interim government. Julio Borges, who is exiled to Colombia, said, "The interim government should disappear completely."

Borges resigned as former Foreign Policy Chief under Juan Guaido, who declared himself acting President in January 2019 with the support of the West, forming a parallel administration against the Venezuelan people's choice, Nicolas Maduro. 

The US, France, and several European allies did not recognize Maduro's democratic re-election to a second term in the 2018 elections and instead recognized his rival, Juan Guaido, as acting president, despite the latter's democratic loss.

Maduro's government and the country's opposition plan to resume talks in Mexico later this month, which will see the two discuss the conditions for a presidential election in Venezuela.

France also seems interested in Venezuela's oil reserves in light of the ongoing energy crisis in Europe.

In a major foreign policy reversal, French President Emmanuel Macron shook hands and held a conversation on Monday with his Venezuelan counterpart, Nicolas Maduro, on the sidelines of the COP27 climate summit in Egypt.

However, in an earlier semi-reversal in mid-June, the French presidency called for a "diversification of supplies", including oil supplies from Iran and Venezuela to help bring down soaring crude prices fuelled by the war in Ukraine.

In 2019, Macron recognized Guaido as acting president, describing Maduro's election as "illegitimate" and calling for "a restoration of democracy" in the country.