U.S.-Venezuelan Oil Deal Should Not Forget Democracy

As the Biden administration scrambles to prepare for a potential embargo of Russian oil, it sent officials to Caracas this past weekend to meet with Venezuelan President Nicolás Maduro. Facilitated by Swiss diplomats, the trip saw Juan Gonzalez, the senior director for the Western Hemisphere at the National Security Council; Roger Carstens, the special envoy for hostage affairs; and Ambassador to Venezuela Jimmy Story meet directly with Maduro. This was highly unexpected, considering there have been no high-level meetings between the United States and Venezuela in more than five years. Up until Russia’s recent invasion of Ukraine, the Biden administration had consistently suggested Maduro needs to negotiate not with Washington but with the Venezuelan opposition.

However, this sudden interest should not come as a surprise. Western countries’ unprecedented sanctions aimed at isolating Russian President Vladimir Putin have understandably generated a focus on alternative oil suppliers, including Venezuela, whose oil the United States has sanctioned since 2019. Across the political spectrum, commentators from Fareed Zakaria to Trish Regan have called on the United States to lift sanctions on Venezuela to help compensate for the loss of oil from Russia. U.S. Secretary of State Antony Blinken said the administration is currently communicating with European allies about a boycott of Russian oil, “while making sure that there is still an appropriate supply of oil on world markets.”

A U.S.-Venezuelan deal would be a crucial piece in the puzzle of sanctioning Russian energy, a step U.S. President Joe Biden announced today. Venezuelan oil would be a perfect substitute for Russian oil in large part because Russian oil has been a perfect substitute for Venezuelan oil. Much of the oil refining industry on the U.S. Gulf Coast is built for heavy crude oil like that produced by Venezuela—some, such as the Citgo refinery in Lake Charles, Louisiana, was built specifically for Venezuelan crude. These refineries cannot run at capacity producing gasoline and other petroleum products from light oil grades such as those produced by U.S. shale drillers or Saudi Arabia, and there is not enough pipeline capacity to bring heavier oil grades down from Canada. When sanctions were levied on the Venezuelan oil industry, U.S. refiners’ sudden supply shortages were filled by Russia, which also produces a heavier grade. Indeed, Russian oil deliveries to the United States have roughly doubled since the start of U.S. oil sanctions on Venezuela in 2019.

The geopolitics do not end there. One of Putin’s motivations in deepening Russia’s relationship with Venezuela in recent years may have been precisely to counterbalance U.S. and European support for Ukraine. Indeed as former U.S. National Security Council senior official Fiona Hill testified in Congress in 2019, the Russians at one time even offered the Trump administration a deal to swap Venezuela for Ukraine.

Maduro should be concerned that, should Russia win control over Ukraine, Putin could lose interest in Venezuela as a chip. Of course, Russia could become more interested as well, depending on the course of the invasion. However, the uncertainty likely has Maduro’s attention. He has loudly supported Putin in the media—but also seems to be hedging his bets. For example, Venezuela quietly abstained from the United Nations Human Rights Council vote on establishing an international commission of inquiry regarding Russia’s war in Ukraine.

In addition to addressing oil needs, this diplomatic initiative has great potential to shake up the stalemate of Venezuelan politics.

Simply peeling Maduro away from Putin is probably not in the cards. Venezuela’s relationship with Russia started gaining significance during the government of Hugo Chávez and has seriously deepened under his successor. Maduro largely survived the pressure of the past three years because of Russian military and diplomatic support—and because Russia helped him skirt U.S. sanctions. A quick about-face in U.S. policy due to an extraordinary geopolitical contingency does not come close to creating the trust that would get Maduro to turn on a crucial ally. However, directly engaging the Maduro government at least rolls the ball in the right direction.

The results of the trip are still unclear, but an announcement is expected soon. Insiders suggest the U.S. delegation expressed a willingness to provide U.S. and European companies operating in Venezuela with licenses allowing greater flexibility in operations and access to Venezuelan oil and natural gas. In pursuit of this partial sanctions relief, Maduro has committed to returning to negotiations with the Venezuelan opposition. Talks had begun in Mexico City in August 2021 but were frozen by Maduro two months later, following the extradition of an alleged Maduro financier, the Colombian businessman Alex Saab, from Cape Verde to face money laundering charges in the United States. There may also be a release of some Venezuelan political prisoners and U.S. citizens being detained in Venezuela. This could include Matthew Heath, a former U.S. Marine jailed on terrorism and arms trafficking charges, and members of the so-called Citgo Six—Venezuelan American oil executives detained since 2017 on corruption charges.

In addition to addressing U.S. oil needs, this diplomatic initiative has great potential to shake up the tragic stalemate of Venezuelan politics, where an unpopular authoritarian government is oppressing its people and an opposition movement led by former Popular Will party leader Juan Guaidó has lost its steam. As urgent as it is to put a stop to Putin, the Biden administration needs to make sure that any oil deal with the Maduro government works to strengthen the rights of Venezuelans rather than strengthening a dictator.

This more recent push comes amid calls over the past year for the administration to engage the Maduro government—or at least review sanctions. Leading voices in support of a new U.S. Venezuela policy include House Foreign Affairs Committee Chair Gregory Meeks, Sen. Chris Murphy, and civil society organizations advocating for a negotiated political agreement. Of course, Maduro has long expressed the desire to cut a deal. Guaidó, too, presented a plan in January for Washington to alleviate sanctions to get Maduro back to the negotiation table.

The Biden administration, however, had been dragging its feet on Venezuela until now. This is in large part because it fears any letup of U.S. pressure on Maduro will cost the Democrats votes in South Florida. There, a strong Venezuelan diaspora has followed in the footsteps of Cuban expats in favoring hard-line policies toward the government it fled.

Predictably, this week’s negotiations have riled Republican hard-liners who see any diplomatic engagement with foes as appeasement. Their criticisms are clearly motivated by U.S. domestic politics—but should not be dismissed out of hand. There is, in fact, no guarantee that diplomatic engagement will improve the lot of Venezuelans suffering from years of increasing authoritarianism and economic collapse. If handled well, the negotiations could jump-start the stalled intra-Venezuelan talks in Mexico or even lead directly to democratic concessions. But if handled poorly, they could end up sacrificing the Venezuelan people’s fight against one authoritarian leader in favor of the Ukrainian people’s fight against another authoritarian leader.

Since the Biden administration has already assumed the political costs for this effort, it should now follow through and make sure they bear fruit. It would be good for U.S. negotiators to focus not just on prisoner release but also on broader human rights issues, such as improving electoral institutions, stopping the judicial persecution of opposition politicians, and ceasing harassment of journalists and activists. While economic sanctions like those on oil should be negotiated, individual sanctions on regime officials who have committed grave human rights violations or other crimes should continue.

Getting a commitment from the Maduro government to return to the Mexico talks is an important success. Getting its commitment to make progress there would be even more important. The Maduro government has developed a modus operandi of using dialogue as a nonbinding substitute for the democratic institutions it has undermined. Getting Maduro to commit to a road map for negotiations—with benchmarks for humanitarian improvements, restoring the rule of law, and an election calendar—could spur the return to democracy Venezuelan citizens have been struggling for.