Joe Biden’s Venezuela Deal Is Risky But Worth Trying

By Luis Fleischman, PhD

A few months ago, the Biden Administration granted five U.S. oil companies limited authorization to resume pumping oil from Venezuela. The decision came after the Venezuelan government and the opposition reached a humanitarian relief agreement and to resume negotiations to resolve the country’s political crisis, focusing on Venezuela’s 2024 elections.

Other sanctions imposed on Venezuela remain in place. According to the Treasury Department, the United States will continue to hold accountable anybody that “engages in corruption, violates U.S. laws, or abuses human rights in Venezuela.” However, if the Venezuelan regime takes further steps in the negotiations and displays goodwill, future sanctions may be relieved.

Although the Biden Administration denies that this deal resulted from the global energy crisis and its impact on oil prices, some believe it could help lower gas prices as more oil is added to the global market. Others believe it will not be enough.

Harsher critics claim that this step will open a slippery slope where more companies are likely to demand the same rights as the Americans who were allowed to operate, eventually rewarding the Maduro regime. President Biden must ensure that this latest deal remains a pilot program that can be snapped back if Maduro does not comply or respect the process.

But let’s look at this from another perspective. This action may provide additional leverage to the United States, besides serving as a test for Maduro’s willingness to negotiate for real.

If the Americans resume oil production, it will help prevent further encroachment of Venezuela’s oil industry by Russia, China and Iran. The license itself prohibits transactions involving goods and services from Iran, and business dealings with Venezuelan entities owned or controlled by Russians. Secondly, restoring oil sales to the United States — Venezuela’s traditional market — could force the Venezuelan government to adopt a more pragmatic position. But this will not happen without the U.S.’ unyielding insistence that Venezuela stops imprisoning, killing and torturing political dissidents, and that the country opens its political system to an eventual transition to democracy.

This point is crucial since Maduro can’t be trusted to agree to fair elections, and less so to a democratic transition. First, the democratic opposition needs to be united and act responsibly. This is particularly important as the opposition-controlled National Assembly voted to dissolve the interim government in late December, thereby removing Juan Guaido as Interim President. Divisions within the opposition weaken its leverage in the negotiation process. Secondly, as Elliot Abrams pointed out, it is important to keep helping the opposition survive through American and international funding.

The Biden Administration must also insist that a better business environment – such as equal opportunities — be implemented to promote private sector recovery. If the private sector is revived, there’s hope that Venezuelans could at least aspire to a better life and the bleeding of mass emigration could subside. Venezuela is ranked 188 out of 190 countries on the World Bank’s ease of doing business index. The opposition and the U.S should push for a market opening and reviving the private sector. However, this should not be limited to privatizing state companies since the regime will most likely end up selling to its friends.

Likewise, the United States must also be assertive in demanding that the regime stop its involvement in drug trafficking activities and sever ties to Iran and other rogue elements. There’s no question that the Administration is making a bet whose results are unpredictable. Yet, the fact that Maduro accepted its conditions means there’s leverage on both sides.

The Venezuelan situation is dangerous for the entire region. The Bolivarian revolution has brought misery, crime and bankruptcy, and is a transnational phenomenon that endangers regional security, including that of the United States itself. China, Russia, Iran and the drug cartels are already deeply involved in the region.

Evidently, Trump’s “maximum pressure” policy did not achieve its intended goals.  On the absence of alternatives, it is worthwhile trying this option.

Luis Fleischman, PhD, is co-founder of the Palm Beach Center for Democracy & Policy Research, and professor of Social Sciences at Palm Beach College.

This op-ed was first published in Real Clear Energy.