Venezuela’s oil output fell from 3.2 million barrels a day in the 1990s to 558,000 in 2021, according to the Council on Foreign Relations. American sanctions sit in the middle of that story, though not at the start of it.
From arms ban to financial cut-off
The earliest measure was narrow. In 2006, President George W. Bush banned US commercial arms sales to Venezuela, citing weak cooperation on counterterrorism and narcotics. Congress added a human-rights sanctions authority for President Obama in 2014 after protests and reports of police abuse. A year later Obama declared Venezuela a national security threat and sanctioned senior officials.
Donald Trump went further. His August 2017 executive order barred US purchases of Venezuelan government debt, and by the end of his term he had signed seven executive orders aimed at state entities and the central bank. The Maduro government lost its access to the US financial system. PDVSA’s exports to the United States were blocked.
2019: oil, gold, the central bank
Everything sharpened in 2019. The Center for Strategic and International Studies lists the sequence. PDVSA was designated in January, with the penalties effective in June. The gold miner Minerven was sanctioned in March, and the Central Bank of Venezuela in April. In August Washington announced a full embargo and gained authority to apply secondary sanctions.
What caused what is contested. CSIS authors Moises Rendon and Max Price argued that “Sanctions did not cause the economic or humanitarian crisis,” since conditions were already severe before the measures arrived. Oil production had slid from 2.4 million barrels per day in 2015 to about 1 million at the end of 2018. Inflation hit 255% in 2016 and passed 1 million% by 2019. More than 2 million Venezuelans had already left. Even so, a survey cited by CSIS found 68% of Venezuelans thought sanctions made life worse. The authors warned that sectoral measures could hurt vulnerable civilians.
The Council on Foreign Relations put the 2019 oil sanctions among the likely contributors to the collapse. GDP shrank 35 percent that year.
Biden: talks, relief, reversal
President Biden kept most Trump-era measures but opened direct talks with Maduro’s government. By late 2022 the CFR reported the economy was growing again, with projections of 12 percent growth, and the administration was weighing conditional easing of oil sanctions in exchange for democratic steps and opposition talks tied to the 2024 elections.
Relief came after the October 2023 Barbados agreement between Maduro and the US-backed opposition. It did not last. April 2024 was the deadline for Maduro to honor electoral guarantees, and Foreign Policy reported that Washington let General License 44, which authorized investment and trade in the oil sector, lapse. General License 41, covering Chevron’s operations, stayed in force, leaving room for case-by-case licensing.
Maduro had by then blocked opposition candidate Maria Corina Machado. Edmundo Gonzalez Urrutia became the opposition’s nominee.
Isabel Rowan Scarpino of the Center for a New American Security, writing in Foreign Policy on May 2, 2024, was blunt about the limits: “Sanctions will never be effective so long as Venezuelan President Nicolas Maduro values his political survival above his country’s economic well-being.” She argued that sectoral sanctions also hurt the prospects of a democratic transition and push Caracas closer to Russia, Iran and China.
Sources
- Do U.S. Sanctions on Venezuela Work?
- Are Sanctions Working in Venezuela?
- U.S. Reimposes Oil Sanctions on Venezuela Following Electoral Backsliding
