Nicolás Maduro Smiles: Venezuela Sends Oil To Europe Again

The crisis in Ukraine continues to produce unthinkable consequences in a few months. Recently, the United States authorized two major European oil companies (the Spanish Repsol and the Italian Eni) to transport oil directly from Venezuela to the old continent.

This measure will begin to have direct effects from the month of July, since the exports of Venezuelan crude oil for June are already assigned, prior to the partial lifting of the sanctions.

In this way, both Repsol and Eni can begin to redeem the debt and dividends not collected in PDVSA. This, to relieve internal tension due to the sixth package of sanctions of the European Union against Russian oil.

Thus, the United States seeks that its allies in Europe can alleviate a possible energy crisis. However, the amount of oil and gas that can be released and shipped, would not represent large changes in prices, at least not in the short term.

Although for now there are only 2 European companies, it is expected that in the future Chevron and even the Indian Oil and Natural Gas Corp Ltd (ONGC) and the French Maurel & Prom SA, which have also asked for an exception to the sanctions to also transport oil.

The fine print of the deal

Despite the lifting of sanctions, they do not disappear. The bulk of the entire diplomatic war that has started several administrations ago is maintained and the move by the White House today has several conditions.

First, the oil or gas produced by PDVSA together with Repsol, Chevron, and Eni must go exclusively to the European market. Subsequent resale to third parties is prohibited.
Likewise, for now, the movement of oil must be exchanged for unpaid debts, overdue dividends, recent investments or work carried out. This means that the United States, for now, is opposed to the flow of money to the Chavista regime.

Great news for Nicolás Maduro

This news comes as a symbolic and economic victory for the Venezuelan president. After years of sanctions against him and Venezuelan oil, today he sees that the United States and Europe itself are giving in to the need for cheap crude oil and will have to leave the democratic struggle in the Caribbean country for another time.

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Although for now, the money will not flow into Venezuelan territory, it is possible that the new investment and the reactivation of the oil industry in the country will already bring benefits.

Additionally, this opens the way for future lifting of sanctions. Nicolás Maduro himself described this measure as "slight, small steps. (…) we, in peace and sovereignty, have the entire legal framework to raise and accept investments."

The United States hopes to have the approval of the opposition in Venezuela

The Biden administration also hopes to be able to count on the support of the Venezuelan opposition. An increasingly fragmented and weakened opposition.

For the domestic and regional policy of the United States, having the support of the opposition leaders in Venezuela will be vital for subsequent easing of sanctions against the Maduro government. This is why Washington insists that the ruling party and the opposition meet and advance in a serious dialogue that can lead to free and fair elections in Venezuelan territory.

This, due to the strong pressure that Biden has within big Republican names and one or another Democrat who has questioned the flexibility with Caracas, especially when there has been no progress in the negotiations between the ruling party and the group of Juan Guaidó (president recognized by USA).