U.S. intends to “ease sanctions” to get oil

International Business News – The Biden administration is preparing to reduce sanctions against the Venezuelan government so that Chevron can resume oil extraction in the country, paving the way for the U.S. and Europe to reopen the market to Venezuelan oil, according to people familiar with the matter, the Wall Street Journal reported Oct. 5 on its website.

The report noted that Venezuela was once a major oil producer, but this state-run industry has collapsed in the past 10 years. Sanctions imposed by the Trump administration have further crippled Venezuelan oil production and forced Western companies out of the country. Any shift in U.S. policy that helps Western companies return to Venezuela would send a psychological signal to the market that more oil supplies are coming, people familiar with the matter said.

Francisco Monaldi, a Latin American energy expert at Rice University, said engaging Venezuela, one of the countries with the largest oil reserves, could be a long-term strategy for the U.S. and European countries competing for new sources of energy as the war between Russia and Ukraine drags on and upends the commodities market.

Terms of the agreement are expected to be further defined later this month.