MIAMI — U.S. officials secretly went to Venezuela this weekend to try to unfreeze hostile relations between Vladimir Putin’s top ally, Latin America. This was to halt the fallout from an oil embargo against Russia.
It wasn’t immediately clear what the outcome of talks with President Nicolas Maduro and his government was.
After months of backchannelling from intermediaries (American lobbyists, Norwegian diplomats, and international oil executives), the surprise visit was finally made after Biden had been pressing for a rerun of the failed “maximum Pressure” campaign to overthrow Maduro that he inherited in the Trump administration.
However, Maduro’s risky outreach to Maduro (who has been sanctioned but is currently indicted in New York for drug trafficking charges) became more urgent after Russia’s invasion in Ukraine. The ensuing U.S. sanctions have reshuffled global alliances and will increase gas prices. Inflation already at an all-time high of four decades. As punishment for Putin’s invasion, powerful Democrats and Republicans on Capitol Hill began to support a U.S. ban of Russian oil and natural gasoline imports last week.
According to two people briefed on the visit, Juan Gonzalez was the National Security Council’s senior Director for the Western Hemisphere. Ambassador James Story, who was the highest-ranking U.S. diplomat to Caracas in the Trump administration’s 2019 breakup with Maduro and recognized Juan Guaido the legitimate president of the country, was accompanying Gonzalez.
Roger Carstens, a special presidential envoy to hostage affairs for the State Department, was also present, igniting hopes that Maduro might be open to releasing American prisoners in a gesture of goodwill towards the Biden administration.
Carstens had previously visited Caracas in December, where he met six Citgo oil executives. Matthew Heath was a former Marine and two Green Berets were arrested in connection to a failed raid to overthrow Maduro from Colombia.
According to an anonymous U.S. official, the Biden administration is considering easing Venezuela’s oil sanctions in return for Maduro’s commitment to resume negotiations with his rivals. These talks were halted last fall after a key ally was expelled to the U.S. for corruption charges.
The official stated that Chevron, America’s last oil company in Venezuela could boost production and resume oil exports to Gulf Coast refineries. This is in addition to the shuttle diplomacy. Chevron, which is a state-run oil company, is prohibited from maintaining wells that it operates under U.S. sanctions.
Maduro has not shown any signs that he is willing to leave Putin in his time of need. In a gesture of support, he called the Russian president and attended a Caracas rally where Putin’s ambassador was given a standing ovation by ruling socialist party stalwarts
Maduro stated that it was a crime to do what they are doing to Russia and an economic war. He made these remarks at an event in which he lamented against the U.S. decision to expel Russia’s banks from the SWIFT payments system and to ban flights to its airlines. It’s crazy what they’re doing.
However, such lofty rhetoric aside: The West’s sanctions against Russia and bipartisan support to an all-out oil embargo pose a significant threat to Maduro’s ability to maneuver as effectively as he has so far.
In the wake of U.S. sanctions, Russia was the largest buyer of Venezuelan crude oil. According to an industry expert, PDVSA sold about $2.5 billion worth of crude oil to Russia last year. This was under the condition that anonymity is maintained to protect non-public trade data. This is equivalent to about 25% of South America’s total foreign currency reserves.
According to an industry source, some of the sales were used for debt repayment, but more than $1 million was sent back to Caracas to finance the operations of the struggling state-run oil giant PDVSA. PDVSA has its accounts frozen in the U.S., Europe, and Russia. It also receives oil shipments payments at Moscow’s Promsvyazbank. This is one of the state-owned entities that the Biden administration sanctioned for its ties with Russia’s military.
It is not clear how the U.S. would ease pump pressures. Even though Venezuela has the largest oil reserves in the world, its production plunged to the lowest point in over a century. Even though output began to increase towards the end of 2021 the 755,000 barrels per daily it claimed it produced in January is only a fraction the more than 10,000,000 barrels per day Russia pumped last year.
