US reimposes sanctions on Venezuela's oil and gas sector

The United States is snapping back sanctions on Venezuela's crucial oil industry after easing some of the penalties for six months in return for assurances the South American country would hold free and fair elections this year.

"We are concerned that [President Nicolas] Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society," State Department spokesman Matthew Miller said in a statement on Wednesday.

Oil companies would have a winding-down period until May 31 to comply with the sanctions, Miller said.

However Washington would "continue to assess sanctions policy" based on the Maduro government's actions leading up to the election, the State Department said.

Venezuela is set to hold presidential elections on July 28, 2024, with the winner commencing a six-year term starting January 10, 2025.

Venezuela has the largest proven oil reserves in the world, but production has plummeted after years of mismanagement and crushing sanctions.

Caracas vowed its oil sector would keep going regardless of US policy.

"We will not stop, with or without a license," Petroleum Minister Pedro Tellechea told reporters ahead of Washington's announcement.

The sanctions move is not without risk for Biden as he makes his own bid for reelection this year.

Venezuelan authorities have previously threatened to hit Biden in the sensitive area of migration. More than seven million Venezuelans have fled over the past decade, with many coming to the United States.

Caracas has previously warned it will cancel migrant repatriation flights if Washington continues with its "economic aggression." Venezuelan migrants are flown back to their country from the US under a deal between the two countries

Sanctions could also hit oil prices just as Americans face growing costs at the pump and rising inflation, and polls show that US voters are not buying Biden's sunny messages about the economy.

Tensions over Maduro

In comments to AFP, Maduro's main challenger Maria Corina Machado said the reimposition of sanctions was the result of "a brutal wave of repression" under Maduro.

Maduro, the anointed heir of the late firebrand anti-US leader Hugo Chavez, will be seeking a third six-year term after 11 years in office.

Dozens of countries including the United States rejected the results of 2018 elections that were won by Maduro and boycotted by the opposition.

Most Western and Latin American countries switched recognition to then opposition leader Juan Guaido.

But years of sanctions and other pressure failed to dislodge Maduro, who enjoys support and assistance from several countries including Cuba, Russia and China.

The Biden administration, after initially keeping the sanctions approach of his predecessor Donald Trump, shifted gears.

In November, Washington gave a green light to US oil giant Chevron to operate in Venezuela and, just before Christmas, Venezuela freed 10 detained Americans in a swap with the United States, which released a Maduro confidant.