Lifting Oil Sanctions is a False Dawn for Venezuela

Following a decade of decadence in Venezuela under the regime of Nicolás Maduro, characterized by total economic collapse, rampant corruption, crimes against humanity, and one of the largest ongoing refugee crises in the world, the country awaits presidential elections once more. Due to the Venezuelan government’s abysmal democratic record, the United States has decided to intervene in an attempt to smooth out the electoral process. The two countries struck a deal: a temporary lifting of specific sanctions under the condition that Venezuela’s 2024 presidential election abide by certain rules to ensure their integrity. It’s unclear, however, whether this decision seeks to ensure the long-term success of the Venezuelan people at all or if it only seeks to ease the oil shortages presently faced by so many nations.

Venezuela has the largest proven oil reserves in the world, surpassing those of other major exporters like Saudi Arabia, Iran, and Canada. As a petrostate, Venezuela’s economic growth has historically depended heavily on exporting this commodity, primarily to the US; but these reserves are currently largely underutilized. Oil production has fallen by almost 80% since the turn of the century, the product of decades of political mismanagement and underinvestment.

The sanctions by many Western countries outlawing the purchase of Venezuelan oil forced the country to sell the little oil it produced at a discount to other nations, primarily China. These sanctions were primarily imposed during Trump’s administration, in 2019, at a time when the strength of the Venezuelan opposition had peaked domestically and internationally. A coup against the regime seemed inevitable but, ultimately, nothing materialized, and the continuous chokehold on what is essentially the country’s sole export plummeted the country into even worse economic conditions. This was the last time Venezuelans had hope, and the continuous deterioration of the country on a political, economic, and social level has forced over 7.7 million people to leave the country.

The two countries agreed upon the easing of sanctions on October 18, 2023. Its most important agreement is that, for 6 months, oil and gas-related transactions—that is, trade, investment, and debt repayments—are allowed between the two countries. In exchange, the Venezuelan regime had to stop persecuting the opposition, allowing them to freely campaign, ensuring their safety, and allowing the elections to be overseen by international entities. Before the agreement, the Maduro-affiliated Tribunal of Supreme Justice (the head of the judicial branch) had banned various opposition leaders from holding office for 15 years and participating in the upcoming elections for “treason against the fatherland”, also known as not supporting the government. This includes María Corina Machado, who later won the opposition primary with 93% of the 2.5 million voters and who was seen as the most promising contender against Maduro. The regime was given until the end of November to lift these bans and formalize a timeline for their reinstatement, but it seems that it will not follow through.

The October deal came just a few days before the primary, sparking some hope that perhaps the government would recognize its results; however, expecting a tyranny to follow through on promises of freedom was a false hope. Immediately after the landslide win of Machado, the government rejected the results, pressing criminal charges against the organizers with threats of imprisonment and asking for documents that contained the identities of all primary voters. It even ratified the bans on Machado and other opposition leaders. This complete reversal of what was agreed with the United States is shocking but, sadly, not surprising.

For most Venezuelans, it’s hard to remember “fair and free” elections. It’s almost a foreign concept at this point. The most recent presidential election, in 2018, had the lowest voter turnout in the country’s democratic history, being heavily criticized domestically and internationally for being rigged in favor of Maduro and thus completely illegitimate. Maduro’s coalition has total control over all branches of the government, including the electoral system, so they are free to manipulate the rules in their favor. The previous election in 2013 faced similar manipulation criticism, and the upcoming 2024 election seems to be following the same path.

It’s hard to argue that sanctions had the desired effect on toppling or even reforming the regime, much less preventing corruption. Just this year, in late March, it was discovered that upwards of $21 billion were stolen from PDVSA, the state’s oil company—three times the government’s 2023 fiscal budget and around a fifth of the nation’s GDP. In a country with a collapsing infrastructure, education, and healthcare system it’s hard to argue that such an obscene amount of money went unnoticed by the government. Despite most people associated with the regime having their international assets frozen, they have still found ways to funnel money into their pockets.

However, it’s equally debatable whether lifting the sanctions under the promise of a “fair and free election with international oversight” will result in any tangible improvement. On top of the Venezuelan government’s apparent intentions to ignore the agreement, there’s a serious risk of history repeating itself: the additional oil revenues will either go to the pockets of government affiliates or will be used to fund projects intended to garner political support for the regime. Even if economic conditions were to improve generally, the government could very well claim that it was all thanks to them and that they are “winning” the economic war against el Imperio (“the Empire”, referring to the United States). When facing an authoritarian regime, any political and economic development is manipulated by the government media apparatus to benefit the regime.

Sanctions or the lack thereof do not tackle the fundamental issue in Venezuela’s political system: there is no rule of law. Every single cog works for the benefit of those in power. It was ludicrous from the beginning to think that by lifting the sanctions on oil the regime would even entertain the possibility of handing power to Machado. It’s the very same regime that dismantled the opposition-led National Assembly, shot and killed young high school and university student protesters, actively prevented humanitarian aid from coming into the country, and has tortured and executed thousands of political dissidents. It’s an inherently authoritarian regime, and it will hold onto anything to stay afloat, no matter the cost.

The latest actions on behalf of the regime raise serious questions about the future of sanctions in the country and the upcoming elections. It’s not clear what the reaction from the United States to the government’s decision to uphold the opposition ban will be. Most of the West has deep interests in easing a lagging oil supply that hasn’t been able to fully meet demand following the pandemic, making Venezuela an attractive policy target; however, there’s not much foreign governments can do to help remove the regime that doesn’t involve sending troops—an unlikely scenario, given current geopolitical conflicts elsewhere and the deep interests China and Russia have in Venezuela. While the average Venezuelan rallies behind Machado as their only hope, the opposition lacks political influence on the military and will be unable to overcome rigged polls. Unless some centrist candidate arises from the ranks of Maduro’s coalition, who has enough support from factions of the ruling party to beat Maduro and not be foul-played out of the race, and who is willing to work with the opposition to establish a transition towards lasting democratic rule, it’s hard to imagine any meaningful political change happening in the country. Ultimately, the people of Venezuela have once again been promised a false dawn: freedom is nowhere in sight and the future remains as uncertain as ever.