What Will Eased U.S. Sanctions Mean for Venezuela?

Javier Coronado, partner at Diaz, Reus & Targ, LLP: “The lifting of the sanctions gives PDVSA’s contractors more room to recover their debts and resume business operations. It may also lead to an increase in Venezuelan oil exports to the United States. However, the sanctions lifting is temporary, several key prohibitions remain in place and the new regulations do not authorize the release of blocked property or transactions involving blocked persons other than PDVSA. Accordingly, and considering that Venezuelan crude production and trade have been on the decline for some time, the easing of sanctions is unlikely to have an immediate impact on oil output and investment. There is some ambiguity surrounding Maduro’s commitments under the election road map. After Oct. 18, Maduro’s representatives have continued to acknowledge that each side should be able to choose presidential candidates. However, they have expressed reservations about lifting bans from public office such as that of opposition front-runner María Corina Machado. International scrutiny might encourage Maduro to meet the opposition’s expectations regarding the presidential election. Notably, the U.S. government has emphasized that it is prepared to amend the lifting of sanctions or reimpose them if Maduro fails to follow through on his commitments. This month’s achievements of the opposition, such as the incorporation of international observers to oversee the electoral process, bolster the opposition’s prospects of success in next year’s election. Nevertheless, these prospects hinge on factors like cohesive collaboration among opposition parties and their ability to re-engage with a Venezuelan electorate that may have become disenchanted with the political landscape.”