Texas? North Dakota? Shale country in Pennsylvania, where Democrats look more vulnerable than ever in the upcoming Senate election? Maybe the coasts, where massive US reserves would create a strategic advantage over OPEC+ and allow us to cut off Vladimir Putin’s profits organically?
The Biden administration is preparing to scale down sanctions on Venezuela’s authoritarian regime to allow Chevron Corp. CVX 1.02%▲ to resume pumping oil there, paving the way for a potential reopening of U.S. and European markets to oil exports from Venezuela, according to people familiar with the proposal.
In exchange for the significant sanctions relief, the government of Venezuelan President Nicolás Maduro would resume long-suspended talks with the country’s opposition to discuss conditions needed to hold free and fair presidential elections in 2024, the people said. The U.S., Venezuela’s government and some Venezuelan opposition figures have also worked out a deal that would free up hundreds of millions of dollars in Venezuelan state funds frozen in American banks to pay for imports of food, medicine and equipment for the country’s battered electricity grid and municipal water systems.
Just how desperate a ploy is this? Consider this caveat from the Wall Street Journal’s sources:
U.S. officials said details are still under discussion and cautioned that the deal could fall through, because it is contingent on Mr. Maduro’s top aides resuming talks with the opposition in good faith.
Our energy policy now rests on the good faith of Nicolas Maduro, a tyrant who has reduced Venezuela from a comfortable democracy to a socialist economic disaster. Biden wants to fill Maduro’s pockets again to get himself out of political jam at home, which renders his “good faith” pretense entirely threadbare. Biden has made it clear that he needs Maduro’s oil a lot more than Maduro needs Biden’s money, and he also knows that Biden has no problem throwing generations of Venezuelans under the bus to save his own political carcass.
Biden’s not waiting around for an immediate response from Maduro either. To keep gas prices from skyrocketing before the midterm cycle finishes, the White House will drain the Strategic Petroleum Reserve of an additional 10 million barrels, bringing it to its lowest level since 1985:
The White House plans on releasing 10 million barrels of oil from the Strategic Petroleum Reserve next month in response to the decision from the Organization of the Petroleum Exporting Countries to cut oil production by 2 million barrels a day.
The White House condemned the oil-producing countries for the decision, saying the are “aligning with Russia” and that President Biden will “continue to direct SPR releases as appropriate,” in addition to the millions being released in November.
Biden has been trying to keep U.S. energy prices as low as possible by tapping into the reserve, which is now at its lowest levels since 1985, according to Energy Department data.
They’re hoping that the planned bonus release in November will keep futures markets from shooting too high in October. That would accelerate the gas-price increases that are already emerging over the last couple of weeks, but the 10 million barrels are a drop in the bucket to the planned OPEC+ production cutback of two million barrels a day. Even if that output wasn’t meant for the US, it still lowers global supply by 60 million barrels a month, so adding 10 million barrels in a one-time addition won’t do much at all for prices.