Venezuela has once again found itself under the scrutiny of international sanctions, this time, targeting its oil sector. The United States has announced that it will reimpose sanctions on Venezuela’s oil industry, citing President Nicolás Maduro’s continued crackdown on opposition. This move comes after Washington had relaxed sanctions against the authoritarian leader six months ago, following his announcement of plans for free presidential elections. However, an agreement reached in October between Maduro and the US-backed opposition in Barbados for upcoming elections turned out to be empty as key opposition figures were barred from running.
The easing of sanctions had allowed American oil company Chevron to return to Venezuela and a group of Americans held in the country were released. Despite this, major companies like Shell and Repsol have engaged in deals with Maduro’s government and the state oil company PDVSA. Venezuela, which holds the largest oil reserves in the world, has seen its oil production decline due to mismanagement, lack of maintenance, and US sanctions.
Ten years ago, Venezuela produced 2.9 million barrels of oil per day but as of 2020 production had dropped to 400,000 barrels per day. With the easing of sanctions earlier this year saw a slight increase in production to 800,000 barrels per day in the first quarter. However, production has since dropped again due to ongoing political instability and economic turmoil in the country. The US government has now decided to reintroduce sanctions on Venezuela’s oil sector while leaving the deal between Chevron and PDVSA untouched for now.