U.S. Considers Lifting Sanctions on Venezuela to Boost Oil Sales

U.S. Treasury Secretary Scott Bessent indicated that additional sanctions on Venezuela may be lifted as early as next week. The move aims to facilitate oil sales and support the country’s economy. During an interview, Bessent also announced plans to meet with leaders from the International Monetary Fund (IMF) and World Bank regarding their potential re-engagement with Venezuela.

Bessent highlighted the possibility of deploying nearly $5 billion in frozen IMF Special Drawing Rights (SDRs) to assist in rebuilding Venezuela’s economy. “We’re de-sanctioning the oil that’s going to be sold,” he stated while visiting a facility operated by Winnebago Industries. He emphasized the need to analyze how to facilitate the repatriation of proceeds from oil sales, which are currently stored mainly on ships.

The Treasury’s analysis focuses on how to ensure these funds can help govern and serve the Venezuelan people. When asked about the timeline for lifting sanctions, Bessent noted, “It could be as soon as next week,” without specifying which sanctions would be affected.

Context of Sanctions and Economic Impact

These potential sanctions adjustments come in the wake of heightened tensions, particularly following the recent capture of Venezuelan leader Nicolas Maduro by U.S. forces. Maduro is now facing drug trafficking charges in New York. The U.S. sanctions have previously restricted international banks from engaging with the Venezuelan government without a license, significantly complicating the country’s efforts to restructure its estimated $150 billion debt.

On the same day, President Donald Trump signed an executive order preventing courts or creditors from seizing Venezuelan oil revenue held in U.S. Treasury accounts. Trump declared that these funds should be safeguarded to help create “peace, prosperity and stability” in Venezuela.

IMF and World Bank Re-engagement

Bessent, who holds significant influence over U.S. shares in the IMF and World Bank, mentioned that both institutions have been in contact regarding Venezuela. He expressed willingness to convert Venezuela’s SDRs, currently valued at around $4.9 billion, into dollars for economic rebuilding. The last formal IMF assessment of Venezuela’s economy occurred in 2004, and the country has not engaged with the IMF for over two decades.

According to an IMF spokesperson, the organization is closely monitoring developments in Venezuela without providing further comments on Bessent’s upcoming meeting. The World Bank is reportedly exploring how it might assist Venezuela, recalling its rapid responses to other countries following regime changes.

Bessent noted that smaller, privately held companies would likely re-enter Venezuela’s oil sector quickly, even as larger oil majors like Exxon Mobil exhibit caution due to past nationalizations of their assets. “I think it’s going to be the typical progression where the private companies can move quickly,” he said.

He also mentioned the potential role of the U.S. Export-Import Bank in guaranteeing financing for Venezuela’s oil sector, aligning with previous statements from U.S. Energy Secretary Chris Wright. As negotiations unfold, the international community watches closely to see how these changes may impact Venezuela’s long-struggling economy and its relations with global financial institutions.