Easing of sanctions against Venezuela boosts marine and energy sectors

Easing US sanctions on Venezuela is driving increased activity and interest in key sectors such as oil and gas production and shipping

Venezuela is expected to see increased activity across key economic areas this year – particularly in oil and gas production, marine trade, mining and aviation. This is being driven by the easing of a number of US sanctions on the country in the second half of 2023.

Since June, the US Treasury’s Office of Foreign Assets Control (OFAC) has issued seven general licences authorising certain business activities or transactions with Venezuela, including those relating to the export of liquefied petroleum gas (General License 40B), gas sector operations (General License 44), the state-run mining company Minerven (General License 43) and the state-run airline Conviasa (General License 45A).

With the easing of sanctions, businesses in the US, as well as the UK and Europe, are re-focusing their interest on opportunities in Venezuela.

The country’s control of the largest crude oil reserves globally makes it an increasingly attractive prospect for the global energy markets. This will only increase amidst a continuing squeeze on oil and gas supplies due to Russia’s war with Ukraine and the threat of wider unrest in the Middle East spreading from the Israel-Hamas conflict.

In addition, OFAC has also granted a general licence authorising ‘Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela’ (General License 41).

Other energy companies are believed to be looking into resuming operations in Venezuela with the reduction of sanctions on oil and gas production and export.

The easing of sanctions on marine trade has already driven an uptick in vessels calling at Venezuelan ports, with the expectation of a further increase in marine traffic including oil tankers, LPG carriers, and service vessels for oil and gas platforms.

With the easing of sanctions partly contingent on the current administration’s agreement with the US to hold free elections in 2024, the renewal of that agreement or the reinstatement of sanctions may depend on the outcome of this year’s vote. Future sanctions negotiations will also be contingent on the political relationships that follow upcoming elections in the US, the UK and in EU countries.