Oil Slides On Biden-Maduro Deal For “Freer” Venezuela Elections, Easing Export Sanctions

The Biden White House is set to significantly ease US sanctions on Venezuela’s oil industry as part of a deal for “freer” elections. 

Oil prices reacted immediately, diving sharply, on The Washington Post report, stating, “The Biden administration and the government of Venezuelan President Nicolás Maduro have agreed to a deal in which the U.S. would ease sanctions on Venezuela’s oil industry and the authoritarian state would allow a competitive, internationally monitored presidential election next year, according to two people familiar with the breakthrough talks.”

WTI crude futures fell to $86 and Brent below $90 a barrel. 

For some context on the potential for Venezuela’s increase in production – given infrastructure incapable of a major increase – here is where the nation currently stands…

Going back to the start of the Russia-Ukraine war in February 2022, the Biden administration has scrambled to tap more oil and energy sources. Having had the Saudi door slammed shut after failed pressure to get Riyadh and OPEC to produce more, the White House has sought to bring Venezuelan strongman Nicolás Maduro “in from the cold” – despite it being that only a few short years ago Washington was pursuing regime change in Caracas. 

The prior Trump administration had even mulled a full US naval blockade of Venezuelan ports in the Caribbean. It was only within the past year that the US gave up on the whole ‘Interim President’ Juan Guaidó and his government in exile charade.

A series of secretive meetings between Biden and Maduro top officials have been taking place in Caracas, a negotiation process which began shortly after the start of the Russian invasion of Ukraine. 

But Maduro’s slow “rehabilitation” by the Biden administration is sure to get a fierce reaction among Republican congressional leaders, especially the hawks represented with senators like Marco Rubio. 

Meanwhile…

#Venezuela‘s Maduro expected to visit #Russia, Putin’s oil point man says #oott https://t.co/p2JZlIflDU

— Giovanni Staunovo🛢 (@staunovo) October 16, 2023

One question that remains when it comes to “free” and “monitored” elections in Venezuela… is Maduro really going to allow himself to be canceled by US-monitored elections? 

The Wall Street Journal on Monday has issued a detailed profile of a main opposition hopeful: 

Venezuelan opposition politician Maria Corina Machado wants to challenge the country’s authoritarian president, Nicolás Maduro, at the ballot box. The effort may be hopeless.

His regime has barred the conservative, pro-business politician from holding office. Pro-government motorcycle gangs mount roadblocks against her caravan when she campaigns, social-media videos show. State TV plays surreptitious recordings of her private phone calls in an apparent effort to embarrass her. Fearing arrest, close aides have fled Venezuela. 

Adding to her challenges, the U.S. and other governments said Maduro rigged the last vote, in 2018.

But Machado, a 56-year-old engineer from a prominent industrial family, said she is undeterred. Polls show she comfortably leads other politicians ahead of the Oct. 22 primary the opposition will hold. The winner would be expected to square off against Maduro in elections that could be held next year—but only if the leftist leader permits a vote. 

According to the impending Biden deal with Caracas, Maduro is expected to “permit” the vote, presumably to include Machado on the ballot. 

Machado said, “This is a government in its worst moment, they’ve lost their social base” in a recent interview. “All of us Venezuelans and the international community must force them to go ahead with clean, fair and free elections.”