On Wednesday, the Wall Street Journal reported that the Biden administration is offering strongman Venezuelan President Nicolás Maduro relief from sanctions to allow Chevron to resume extracting oil — on the condition that he allow real elections to take place in the repressive leftist dictatorship.
"In exchange for the significant sanctions relief, the government of Venezuelan President Nicolás Maduro would resume long-suspended talks with the country’s opposition to discuss conditions needed to hold free and fair presidential elections in 2024, the people said," reported Patricia Garip, Vivian Salama, and Kejal Vyas. "The U.S., Venezuela’s government and some Venezuelan opposition figures have also worked out a deal that would free up hundreds of millions of dollars in Venezuelan state funds frozen in American banks to pay for imports of food, medicine and equipment for the country’s battered electricity grid and municipal water systems."
The report comes as the Organization of Petroleum Exporting Countries (OPEC) is announcing a cut to overall oil production, a move that sparked outrage among U.S. officials given America's longstanding military support for many of these nations as part of an implicit way to ensure global energy stability.
"If the deal goes through and Chevron, along with U.S. oil service companies, are allowed to work in Venezuela again, it would put only a limited amount of new oil on the world market in the short term," said the report. "Venezuela was once a major oil producer, pumping more than 3.2 million barrels a day in the 1990s, but the state-run industry has collapsed over the last decade because of underinvestment, corruption and mismanagement. Sanctions leveled by the Trump administration further dented production and forced Western companies out of the country."
Nevertheless, the report noted, "Any shift in U.S. policy that brings back Western oil companies would send a psychological signal to the market that more supply is on the way, the people said."
U.S. fuel prices, which soared over the summer due to a number of factors including the Russian invasion of Ukraine, declined significantly in recent months, although some refinery issues have caused small regional increases again in parts of the Midwest and West Coast.