Spotlight: US extends Venezuela LPG export license as tensions ease

The US government has extended a license allowing liquefied petroleum gas (LPG) exports to Venezuela in a further sign of easing tensions between the countries. 

In a statement issued late Monday, the US Office of Foreign Assets Control (OFAC) said the decision allowed "certain transactions involving the export or re-export" of LPG to the South American country.

Venezuela relies on foreign LPG shipments to meet a shortfall of the fuel for household cooking. According to consultancy firm Gas Energy, Venezuela's state oil company PDVSA produced around 27,000b/d of the gas in 2022, which was not enough to cover domestic demand. 

OFAC, a unit of the US treasury department, said the ruling did not authorize any payment in kind of petroleum or petroleum products, nor transactions involving embargoed individuals or PDVSA.

Washington began imposing a series of sanctions against the regime of Venezuelan President Nicolás Maduro in 2017, promising to lift them only if Caracas guaranteed free elections and the release of political prisoners. 

Despite Venezuela's failure to meet such demands, there have been signs of a thaw in relations between the countries in recent months, driven by fears of global energy shortages amid the war in Ukraine. 

Late last year, the Biden administration granted Chevron a license to resume oil production in Venezuela after the first talks between officials of both countries in years.

Oil exports from the OPEC nation have since risen sharply, reaching a 16-month high of 560,000b/d in April. The figure, however, remains well short of the government's target of 1Mb/d, less than half of the country's daily output when Maduro rose to power in 2013.

"Maduro is clearly interested in getting sanctions relaxation, but on the other hand, he’s not willing to give up in any significant way his hold on power,” Francisco Monaldi, a Latin American energy policy expert at Rice University, told BNamericas last month. 

"That makes the situation very fragile. If there is any further sanction relief it's unlikely to be significant enough to lead to a recovery of the Venezuelan oil industry."

Maduro, for his part, stepped up his criticism of the White House on his television program on Tuesday, calling for a definitive end to the sanctions. 

"Venezuela, like all the nations of the world, is a free, sovereign country. How is it that they are now going to give licenses [for LPG exports]? What is that?" he said. 

"We advocate for free trade, for absolute economic freedom. What do the gringos think? That Venezuela is a gringo colony that needs their licenses and permits? ... this is outrageous, it outrages us," he added.