January 2025
‘Maximum pressure’ sanctions on Venezuela help US adversaries, hurt Venezuelans
About this brief
Introduction
Written by William Tobin Assistant director Atlantic Council Global Energy Center
The reelection of Donald Trump as US president has spurred calls for a return to a “maximum pressure” sanctions policy against Venezuela, which would force Western oil firms to exit the country.1 But experience shows that reimposing maximum pressure would increase Russian, Chinese, and Iranian influence in Venezuela to the detriment of US interests, with no guarantee of progress toward democratization.
January 2025
The United States has deployed multiple strategies to promote democracy in Venezuela and dislodge Nicolás Maduro from power.2 In 2019, the Trump administration’s maximum pressure campaign imposed broad sanctions on Venezuela, including secondary sanctions on companies that invest in its oil sector. The US government sanctioned the national oil company PDVSA, the Central Bank of Venezuela, and the state gold mining company. This followed executive orders restricting the Venezuelan government’s access to debt and equity markets, as well as prohibiting transactions with the Venezuelan government-issued cryptocurrency, the Petro.3 Important lessons were learned from this experience. Venezuela’s oil production was rerouted to China at discounted prices, Iran supplied the diluent Venezuela required for oil production, and Russian investors became more critical to maintaining production amid a prohibition on Western investment. A democratic transition remained elusive while repression and human rights violations continued. Venezuelans suffered, US adversaries expanded their influence, and Maduro remained.
Maximum pressure was a gift to China, Russia, and Iran
The Atlantic Council Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to netzero emissions.
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The maximum pressure sanctions strategy was not only ineffective at driving Maduro from power, but also benefitted the United States’ geopolitical adversaries. Venezuela is a microcosm of the unfolding competition between the United States and China— and secondarily between the United States and Russia and Iran—in Latin America and the Caribbean. This competition is reflected in the three most prominent foreign investors in Venezuela’s oil sector: the US company
1
Chevron, the China National Petroleum Corporation (CNPC), and Russia’s Roszarubezhneft, comprising Rosneft’s former Venezuelan assets. During the maximum pressure campaign, a path was created for US entities to cede influence to Russian and Chinese counterparts, and for Iran to play an enabling role in sustaining PDVSA’s output. This loss of influence was precipitated by the 2020 annulment of the provisions in General License 8 (GL8) by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC).
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