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Issue Brief January 23, 2025

‘Maximum pressure’ sanctions on Venezuela help US adversaries, hurt Venezuelans

By William Tobin

The “maximum pressure” strategy employed from 2018 to 2022 against the illegitimate Nicolás Maduro regime in Venezuela did not serve US interests. Stringent oil sanctions imposed on Venezuela forced the retreat of Western oil firms from the country, principally benefitting adversaries. During the maximum pressure campaign, 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 amid a dearth 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. 

The current system of issuing specific licenses for Western oil producers to operate in Venezuela has yielded superior results. The benefits of this policy have been the following:    

  1. Venezuelan oil exports have been diverted to friendly nations.
  2. Treasury has increased visibility on all oil-related transactions, decreasing the clandestine shipment of oil through shadow tanker fleets operated by the Chinese defense establishment, Iran, or PDVSA.
  3. Compensation to the regime is limited to taxes and royalties, which are required by Venezuelan law.
  4. The system has enabled the return or reemployment of qualified engineers and technicians to restore production from degraded oilfield infrastructure.

The incoming US administration should prioritize inflicting more harm on the regime and its enablers than the Venezuelan people—or US interests.

To do so, sanctions must be linked to clear objectives. An uncalibrated reapplication of maximum pressure would cede influence to China, Russia, and Iran, while doing little to loosen the regime’s grip on power. Instead, the existing system of specific licenses should be maintained and expanded. To punish Maduro, the administration should continue to target individuals who enable his illegitimate rule, adding to the 180 individuals already sanctioned by the Treasury. A targeted sanctions policy—not maximum pressure—is the only way to ensure that US actions to confront the Maduro regime impose their desired effect, and do not play into the hands of Beijing, Moscow, or Tehran. 

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Image: A tanker is seen off Maracaibo, Venezuela. Photo: Pixabay