U.S. Set to Allow Venezuelan Oil Sanction Waiver to Expire Thursday

The Biden administration said it will not renew the Venezuelan sanctions waiver set to expire Thursday that had eased its ability to export oil to wider markets – namely the U.S.

• The U.S. was seen to have little other option after Venezuelan President Nicolas Maduro fell well short of meeting fairer election requirements after banning key opposition party leaders from running against him in the upcoming elections.
• The U.S. Treasury Department announced on Wednesday that it had issued a replacement license giving companies 45 days to "wind down" their business and transactions in the country.
• "We are concerned that Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society," according to State Department spokesperson Matthew Miller.
• It means Venezuelan crude will likely start heading back to Chinese independent refiners while removing a key heavy feedstock for U.S. Gulf refiners that are already facing tightness for those sorts of grades.
• Venezuela will likely generate less revenue for their barrels, offering them at a discount to Chinese refiners while they will also lose access to U.S. diluent supply for diluting its grades into an exportable form.