US President allies see Venezuela sanctions relief as key to more oil
Donald Trump (photo: Getty Images)
The Trump administration intends to ease sanctions on Venezuela’s oil sector to increase oil production amid a sharp rise in prices caused by the war in Iran, according to Bloomberg.
According to sources, the measures, which could be announced as early as this week, include issuing more individual licenses that would allow foreign companies to operate in Venezuela without violating US sanctions.
In addition, the administration will create a mechanism to make it easier for a wider range of companies to enter the Venezuelan market. However, it is still unclear whether this opportunity will take the form of general licenses.
It is still unclear whether easing sanctions on Venezuelan oil will lead to an increase in production in the short term.
Currently, the country produces about 1 million barrels per day, which is one-third of its peak level in the 1990s. Since then, the country’s infrastructure has significantly deteriorated due to poor management, neglect, corruption, and sanctions.
Francisco Monaldi, Director of Latin American Energy Policy at the Baker Institute for Public Policy at Rice University, believes that Venezuela is unable to produce enough additional oil quickly enough to offset the sharp rise in global prices.
In his opinion, in 2026 Venezuela will increase production by no more than one-third, or about 300,000 barrels per day, which is effectively a drop in the ocean in terms of global demand. However, the Trump administration is making every effort to increase oil supply to the market where possible. Earlier this month, the US temporarily eased some sanctions on Russian oil and also relaxed its efforts to persuade India to stop purchasing Russian oil.
Oil prices
As of March 16, the price of Russian oil for India has risen to its highest level since the start of the war in the Middle East. In particular, Urals crude delivered to the country’s west coast costs $98.93 per barrel.
At the same time, Reuters reports that despite the price surge, Russia’s oil revenues will decline and will be significantly lower compared to last year.
Additionally, according to Reuters, after a four-month pause, China is preparing to resume purchases of Russian oil to avoid shortages caused by the war in Iran.
