The blockade against Venezuela’s oil industry is still intact. Washington’s move to allow Chevron to resume oil production in the Caribbean country, but with no real benefits for the Venezuelan people, is realistically two corporations helping each other amidst a global energy crunch as well as another deplorable demonstration of US imperialism.
Mainstream media and US politicians have been quick to either praise or blast Washington for “easing sanctions,” citing a “major shift” in US policy. Bold statements credit the White House’s "benevolence" to the people it has purposely tortured for years with wide-reaching economic sanctions while others reject the "concession" given to the imaginary Venezuelan dictatorship that lives rent-free in US officials’ heads and western outlets’ editorial rooms.
The truth is, Chevron's six-month license to restart drilling and exporting Venezuelan crude after a nearly three-year US-imposed prohibition hardly amounts to relief from the sanctions program. The country’s oil industry continues under siege with financial sanctions and a full-fledged blockade imposed between 2017 and 2019. The US then threatened foreign companies into abandoning operations and only allowed Chevron to stay for maintenance work.
Before the first sanctions, Venezuela was pumping around 1.9 million barrels per day (bpd) with Chevron’s four joint ventures producing some 200,000 bpd. By the end of 2020, output fell to historic lows, reaching 350,000 bpd. The starved income worsened an economic crisis and further drove a massive migration wave.
Admittedly, Chevron's renewed operations could represent a small (and future) boost to Venezuela’s oil output but the license goes very far to block any profit for the country. And Washington calls this “sanctions relief.” Let’s break it down:
Following the resumption of the dialogue process between the Nicolás Maduro government and the US-backed hardline opposition on November 26, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued “General License (GL) 41 authorizing Chevron to resume limited natural resource extraction operations in Venezuela.”
The license has more limitations than anything else. It stops Chevron from paying taxes or royalties to the Venezuelan government (*). Though not explicitly written, many sources state Venezuelan state oil company PDVSA will not receive profits from the oil sales, which are intended to pay down debt to the giant corporation. Furthermore, crude can only be exported to US refineries.
Additionally, the license “does not authorize other activity with PDVSA” while stating that “other Venezuela-related sanctions and restrictions remain in place.” Nonetheless, the US Treasury somehow claims that this would “alleviate the suffering of the Venezuelan people.”
The only way to alleviate the years-long suffering of the Venezuelan people would be lifting all US-led sanctions against the economy, returning foreign-based seized assets and frozen funds, and stopping the financing of violent coup attempts and self-proclaimed “presidents” who facilitate the aforementioned crimes.
Unsurprisingly, the Venezuelan government is reportedly not thrilled with the Chevron license conditions, according to sources consulted by Reuters. PDVSA and Venezuela's Oil Minister Tareck El Aissami have yet to confirm if Chevron will restart operations. For its part, the California-based company is eager to ship crude as soon as next month.
The Maduro government has never just rolled over to accommodate US demands. In August, Caracas suspended oil cargoes to Europe after deciding that the oil-for-debt swap deals with Italy’s Eni and Spain’s Repsol were not reciprocal enough. The shipments later resumed but these companies are taking diluted crude oil (DCO), a lower-value blend.
Sovereignty over Venezuela’s resources was a crucial and hard-earned victory during the Chávez government after decades of bending over backwards for US corporations and receiving scraps. The historical 2001 Hydrocarbon Law increased oil royalties paid by transnational companies from 1 to 33.33 percent and set a 51 percent minimum state stake in all joint ventures with PDVSA. Wealth redistribution allowed for significant improvements in the population’s living conditions.
The Chevron license terms could expand in the future, and it could be a precedent for other licenses, but this seems very unlikely. Washington has conditioned any sanctions relief to the negotiation of “free elections" between the democratically elected Maduro government and the rightwing opposition.
In 2024, the Venezuelan people will vote to elect (or re-elect) their leader through a process that has been internationally credited as transparent by everyone who has bothered to witness it. The White House, however, only considers elections worthy of recognition when a US-friendly politician becomes president. Otherwise, Venezuelans will just have to continue enduring sanctions.
The resumed government-opposition dialogue process in Mexico had another consequence besides the Chevron license. The delegations signed an agreement to release US $3 billion in Venezuelan frozen funds abroad to be managed by the United Nations (UN) to invest in education, public health, food security, and electricity programs.
It is good news because many people will get much-needed humanitarian aid but the sheer audacity of it all is astonishing. Washington has stolen billions in Venezuelan assets and resources, prohibited their use for essential imports while people were dying from lack of medicines, and now the only way to access them is through a third party and intermediary NGOs.
Reasonably, upon hearing about the Chevron license and the UN-managed funds, outrage has exploded among Venezuelans on social media. Some invoked Hugo Chávez’s iconic anti-imperialist battle cry: “Go to hell, Yankees de mierda!”
Venezuela should not have to negotiate control over its resources!
(*) There has been confusion surrounding this issue, with some analysts claiming this prohibition is more of a smokescreen since it is the joint ventures, where Chevron has minority stakes, that are supposed to pay taxes and royalties.