In a surprising development last year, US started importing Venezuelan oil. However, the transaction between both the nations was based on the terms dictated by US.
One of the terms was its refusal to pay for the oil with money. Not only this, it even instructed European firms to do the same. US assumed that it could bully Venezuela however it wants. Well, its plan has backfired.
Now, Venezuelan President Nicholas Maduro has stopped all oil imports to US. This can potentially jeopardise US’ brand oil plan for Europe which it hoped would damage Russia.
The US negotiated an oil deal with Venezuela on the condition that it would table talks with the nation’s opposition. Following this, the Nicolas Maduro administration and the opposition signed an accord to establish an UN-administered fund to offer humanitarian relief to the Venezuelan people.
The negotiations were aimed at finding a shared solution to the crisis affecting the South American nation. Biden administration claimed that that it had removed oil sanctions on Venezuela. The move was shown as Venezuelan re-entrance to world oil markets.The second-largest American oil company, Chevron Corp., was permitted to increase production in Venezuela. Chevron would then export crude oil from that South American nation to the US.
In short, big claims were made about the deal. But nothing of the sort materialised. Because what was not told is that the US wanted the oil for free.
It limited any monetary transfers to Venezuela. On the condition that no money be transferred to the nation, Washington even approved European businesses to resume buying Venezuelan crude oil.
Further, the sanction relaxation was meant to extend more privileges to the last significant American oil business still operating in Venezuela under U.S. embargo. US’ recently approved Trinidad and Tobago to explore natural gas in Dragon natural gas field in Venezuela. But, it forbade the transfer of money.
Trinidad and Tobago’s Prime Minister Keith Rowley, said that his country would compensate Venezuela for natural gas generated at an offshore development with food and medicine. Rowley said this will be done to comply with US’ decision.
Also Read: US-Venezuela oil deal is a threat to Venezuela’s sovereignty
Maduro stops oil imports
US has constantly tried to undermine Venezuelan sovereignty. It is highly critical of Nicholas Maduro and doesn’t recognise him as the legitimate President.
Now, Venezuelan President has come out against US’ dictatorial moves. He criticized the Trinidad and Tobago’s deal with US. He said, “they tell a country it has permission to negotiate with Venezuela, but it cannot pay in dollars or any form of cash. It must pay with food or products.”
The order came from the Office of Foreign Assets Control (OFAC) of the U.S. Treasury, which was denounced by the President. Maduro said that OFAC was dictating how to conduct business with Venezuela to state and private enterprises.
Maduro went on to say, “That is colonialism.” Maduro has stopped export of oil till payment isn’t made. On January 27th, 28 vessels were parked on Venezuelan ports. They are waiting to load 45 million barrels of oil.
It is hypocritical of US to not pay country which has been reeling in economic crisis. Venezuelan state-owned oil firm PDVSA’s CEO Pedro Tellechea has insisted on prepayment. He says that prepayment would place the company in a beneficial business situation, as it guarantees income for the nation which is necessary to improve its economic status.
The blocking of oil exports by Venezuela has put US’ plans on a break. US’ was hoping that Venezuelan oil can be sent to Europe. Post the Russia-Ukraine War, Europe has been trying to decouple from Russian oil. Russia has gained enormously as a result of oil exports after Ukraine war. It has constantly tried to increase oil production across the world to decrease oil prices. Biden even went to Saudi Arabia to request gulf nation to increase oil production. Though, he was rebuked.
Biden administration removed oil sanctions from Venezuela in the same anticipation. However, Maduro blocking oil exports have put his game plan in jeopardy. It remains to be seen what the next step would be for Biden. Though, he should tread carefully, because he’s been losing on all fronts for a while.
