Nicolas Maduro speaks from Miraflores Palace during a pro-government rally in protest against US sanctions in Caracas, Venezuela, on 23 January 2023. Credit: Carlos Becerra/Bloomberg via Getty Images.

The US Government on Wednesday suspended sanctions on Venezuelan oil after the South American country’s contentious Nicolas Maduro government reached a deal with the opposition for an electoral road map.

Under-Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a press statement: “The United States welcomes the signing of an electoral roadmap agreement between the Unitary Platform and Maduro representatives.

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“Consistent with U.S. sanctions policy, in response to these democratic developments, the U.S. Department of the Treasury has issued General Licenses authorizing transactions involving Venezuela’s oil and gas sector and gold sector, as well as removing the ban on secondary trading.”

A deal agreeing on a time frame for general elections in Venezuela was a key condition set by Washington for the removal of sanctions. The US initially imposed sanctions on Venezuela in 2019 in an attempt to force the displacement of President Nicolas Maduro following disputed elections. Allegations of electoral fraud led to international condemnation of the election result in mid-2018. In the years following, the country has faced severe political and economic unrest, with millions leaving the country since Maduro came to power, his first six-year term, in 2013.

Since 2019, these sanctions have banned Venezuelan state-owned oil company PDVSA from exporting oil to its chosen markets.

The Treasury has issued a six-month general licence temporarily authorising transactions involving the oil and gas sector in Venezuela. This licence will be renewed only if Venezuela meets its commitments under the electoral road map agreed upon, as well as other commitments with respect to those who are wrongfully detained. This refers to US citizens currently imprisoned in the South American country against the will of the US Government.

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The Treasury also issued a second general licence authorising dealings with Minerven, Venezuela’s state-owned gold mining company, which hopes to reduce black-market trading in gold, the department said. It added that it has amended two relevant licences to remove the secondary trading ban on certain Venezuelan sovereign bonds and PDVSA debt and equity. However, the ban on trading in the primary Venezuelan bond market remains in place.

“[The] Treasury is prepared to amend or revoke authorisations at any time, should representatives of Maduro fail to follow through on their commitments,” Nelson added. “All other restrictions imposed by the United States on Venezuela remain in place, and we will continue to hold bad actors accountable. We stand with the Venezuelan people and support Venezuelan democracy.”