Venezuela Sanctions Are Back on the Table

I’m convinced we live in a time loop where we’re doomed to repeat our mistakes.

Today, I can’t help but feel a hefty dose of déjà vu as I scroll through this morning’s headlines. It didn’t take long to come across the latest threat from the Biden administration that it would reimpose oil sanctions on Venezuela. 

You know, last summer I jokingly told you that insanity was doing the same thing over and over and expecting different results, and that there was a certain degree of insanity in mending ties with Venezuela. 

But there was a reason why I believe President Biden waived sanctions on Venezuela — he had no choice. 

To understand why this is, you first have to realize that we’ve backed ourselves into a corner. 

Depleting more than half of the strategic reserves in 2022 to provide short-term relief for oil prices when the market was panicking over the Russia-Ukraine war was a gamble for President Biden. 

Couple this with flat growth in U.S. oil production in 2024, and we’ve officially handed over the keys to controlling global crude supply to OPEC and Russia.

To be fair, it really was the only tool he had available at the time; we can only speculate how high crude prices would’ve climbed if it hadn’t been for the sale of 180 million barrels from the SPR. 

He made an executive decision, for good or for worse. 

Now it’s two years later, and people are finally starting to realize that we won’t be replacing those crude reserves anytime soon — especially if the goal is to purchase those barrels back below $70 per barrel. 

Meanwhile, backing off from our sanctions on Venezuela has yielded an embarrassing trickle of oil to help keep prices stable. 

Go ahead and look at our imports from Venezuela since we started buying crude last year:

Last January, we imported approximately 152,000 barrels per day of Venezuelan crude. Remember, this is the poor quality oil that our refiners along the Gulf Coast of Mexico crave — their facilities are geared toward processing this heavy crude. 

Let’s ignore the fact that PDVSA, Venezuela’s state-run oil company, is in shambles. Venezuela’s production has been in jeopardy ever since output started falling off the cliff 24 years ago.

Of course, also keep in mind that the ONLY stipulation we asked for from President Maduro was to simply hold free and fair elections. 

That’s it. That’s all he had to do to for us to keep buying their oil.

Even still, he failed to keep that promise, which has now put President Biden between a rock and a hard place.

Over the next few days, the U.S. is going to make a decision on whether or not to reimpose sanctions on PDVSA. Some of you may have caught wind of a story regarding U.S. officials meeting secretly with President Maduro to remind him of his promises. 

But here’s the hard part about this decision…

Putting sanctions back in place could help lead to precisely what President Biden fears most — high oil prices during an election year. 

It’s a case of “damned if you do, damned if you don’t” for the Biden administration. 

Fortunately for us, there’s a way out of this mess — perhaps its time you take a moment and check out this opportunity for yourself.

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

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