Monday, March 07, 2022

Secret talks in Venezuela: US officials visit Maduro in effort to further isolate Putin

US officials are exploring a possible partial lifting of oil sanctions imposed on Caracas as part of their strategy to isolate Russia, as well as the possible release of Citgo executives jailed in Venezuela, sources tell Univision.



POR::DAVID C ADAMS
 6 MAR 2022 
Crédito: Ana Maria Otero/AP

Senior U.S. officials flew to Venezuela on Saturday for talks with Nicolas Maduro's government, to explore a deal to partially lift U.S. oil sanctions in the wake of Russia’s invasion of Ukraine and skyrocketing energy prices that are pushing inflation even higher in the United States, according to two sources familiar with the talks.

The secret trip is the highest-level U.S. visit to Venezuela since Washington imposed sweeping sanctions on the Maduro regime in 2019 and appears to be part of a U.S. strategy to isolate Russian President Vladimir Putin.

The U.S. officials, National Security Director for the Western Hemisphere, Juan Gonzalez and ambassador to Venezuela, Jimmy Story, met with Maduro on Saturday, sources told Univision, but neither government has made any official comment about the meeting.

The White House told reporters at a briefing on Friday that the Biden administration was “looking at ways to reduce the import of Russian oil while also making sure that we are maintaining the global supply needs out there."


Bipartisan legislation is already being drawn up in Congress while some 80% of Americans think the United States should stop buying Russian oil, according to a Reuters/Ipsos poll completed on Friday.

But some Republicans strenuosly oppose any deal with Maduro. "Joe Biden using Russia as an excuse to do the deal they always wanted to do anyway with the Maduro Regime," tweeted Florida Senator Marco Rubio on Sunday. "Rather than produce more American oil he wants to replace the oil we buy from one murderous dictator with oil from another murderous dictator," he added.

Russian oil dependence varies globally

Russian oil accounts for only about 5% of U.S. petroleum imports (about 670,000 barrels a day), and a smaller amounts of liquid natural gas, according to the Energy Information Administration (EIA). But U.S. allies in Europe, especially Germany and Italy are much more dependent on Russia for their energy. Germany relies on Russia for about 34% of its oil needs and two-thirds of its natural gas, which itself accounts for 27% percent of all the energy it consumed, according to government figures. (Germany also has wind, solar and nuclear power sources.)

Overall, the European Union imported close to 40% of its total natural gas consumption and 25% of its oil from Russia in 2021.

The United States and its allies are under growing pressure to further punish Russia for its invasion of Ukraine by sanctioning Russia's oil and gas exports. Venezuela, once one of the largest oil and gas exporters in the world, could serve as a potential alternate source of oil supplies should western nations decided to cut off Russian oil and gas exports, which they have so far hesitated from doing.

But Venezuelan oil production has fallen drastically in recent years and critics object to Maduro being allowed to benefit financially without major concessions.

China to tax Venezuelan crude: the possible end of an alliance that marks another chapter in Maduro's economic debacle


US and Venezuela would have to make major concessions

Any a=reement would involve a huge change of policy from both sides. The Biden administration has insisted it will not lift sanctions, including on Venezuela's vital oil sector, unless Maduro takes concrete steps toward holding free elections.


It would also be a stunning development if Maduro were to take any action against the interests of the Kremlin. Venezuela on Feb. 25 blamed the United States and NATO for the crisis in Ukraine, though it abstained in a vote at the United Nations condemning the Russian invasion.

In a March 1 phone call, Putin and Maduro discussed the situation in Ukraine and talked about increasing a strategic partnership between Russia and Venezuela, the Interfax news agency reported, citing the Kremlin.

Advocates of a negotiated solution, like the International Crisis Group, have long advocated for the phased lifting of sanctions in return for progress in restoring institutional rule in Venezuela.

“The current crisis offers an opportunity to break the logjam, but Washington will need to be aware of the danger that a deal under these circumstances might enable the Venezuelan government to sideline opposition voices and consolidate authoritarian rule," said Phil Gunson, the Crisis Group senior analyst for the Andes region.

"Ultimately, the price of combating tyranny is a period of much higher gas prices. That's a price we need to pay as a country," former Treasury Secretary Larry Summers told CNN. "Inflation is a serious problem and this will make it worse. But preserving world order is much more fundamental and important," he added.

In photos: the umbelical cord between Moscow and Caracas
SIGUIENTE GALERÍA



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Hugo Chavez offers a ceremonial sword to Vladimir Putin during the Russian leader's official visit to Venezuela, April 2, 2010. Crédito: AP
Univision

Venezuela gets sanctions support from Russia

Since coming under sanctions, Maduro has retained power with the backing of Russia and several other autocratic allies, including China, Cuba and Iran.

While Venezuela's oil exports have fallen steeply in the last three years, while Russian oil companies and banks have played a key role in helping Maduro and state-run oil company PDVSA evade U.S. sanctions and continue shipments, often using ships without transponders or clandestine ship-to-ship transfers at sea.

In the short run, lifting the Venezuelan oil sanctions “would not have any relevant effect in the world oil market, but perhaps it could help some refiners in the US Gulf of Mexico to replace Russian oil imports,” said Francisco Monaldi, director of the Latin America Energy Program at the Center for Energy Studies at Rice University.

Venezuela produces less than 800 thousand barrels per day and has little remaining production potential, he said. Meanwhile, Russia produces 11 million barrels per day and exports more than 7 million bpd. “So, Venezuela’s additional production would be irrelevant to compensate for a major disruption of Russian exports,” he added.

The US severed diplomatic relations with Maduro and closed its embassy in Caracas in 2019 after accusing the authoritarian leader of electoral fraud.

The U.S. and a large group of democratic countries, deemed Maduro's 2018 re-election a fraud and instead recognized opposition leader Juan Guaido as the country's legitimate president.

Venezuela also hold several Americans in jail, including several oil executives from Citgo, accused of corruption, who could be part of the sanctions bargain.

A former U.S. Marine, Matthew Heath, was also arrested four months after a botched coup in May 2020, launched from Colombia and led in part by a Florida company called Silvercorp USA. The Maduro regime accuses him of being a spy and a terrorist and claims he was caught carrying weapons and explosives.

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