The US is reportedly preparing to relax sanctions on Venezuela to let Chevron pump oil there, as hostilities with OPEC+ build

• The US is looking at easing sanctions on Venezuela so that Chevron can pump more oil there, per the WSJ.
• The proposed deal comes after OPEC+ agreed to cut daily oil production by 2 million barrels a day.

The White House is looking at relaxing some sanctions on Venezuela so that Chevron can pump more oil there, The Wall Street Journal reported Wednesday, citing people familiar with the proposal.

The news comes after OPEC+ shrugged off US calls for its crude producers not to cut output, prompting a fierce response from the Biden administration.

If the proposed deal becomes reality, Chevron and other US oil companies would be allowed to operate in Venezuela again, the WSJ reported.

OPEC and its allies agreed Wednesday to slash oil production targets by 2 million barrels a day from November, despite a behind-the-scenes push by the Biden administration to persuade them otherwise. Analysts called the decision a political blow against the president.

The White House is concerned the cuts could drive up gasoline prices for American drivers ahead of the midterm elections, and could give Russia's battered economy a boost. It called the OPEC+ move "shortsighted", and one US official said the administration was "having a spasm and panicking," CNN reported.

"It's clear that OPEC+ is aligning with Russia with today's announcement," White House spokesperson Karin Jean-Pierre said, per media reports. The White House did not immediately respond to an Insider request for comment.

Many analysts say OPEC+ is more focused on bolstering crude prices, which have trended lower in recent months thanks to worries a looming global recession could hit demand for oil.

Brent crude futures, the international benchmark price, were down slightly at $93.27 a barrel early Thursday, while West Texas Intermediate crude futures were also edging lower at $87.63 a barrel.

It's not clear how much oil could enter the market if the deal goes through, as Venezuela's oil industry has been hurt by underinvestment and mismanagement, OANDA analyst Craig Erlam told Insider.

The amount could be substantial, he said, pointing to a US-led effort to limit the price paid for Russian oil and oil products.

"Any deal could provide some relief in the market at a time when a price cap on Russian crude threatens its output levels and OPEC+ is intent on squeezing the market," he said.

The proposed deal between the US and Venezuela would ease the sanctions in return for political concessions from President Nicolás Maduro's government, the WSJ reported. His regime would need to rekindle suspended talks with its political opposition about free and fair presidential elections, it said.

But US officials warned the deal could still fall through, if Maduro's government doesn't follow through.

In addition, the White House said it has no plans to change its policy on sanctions against Venezuela without "constructive steps" by the country's regime, Reuters reported.

"Our sanctions policy on Venezuela remains unchanged. We will continue to implement and enforce our Venezuela sanctions," Adrienne Watson, a National Security Council spokesperson, said in a statement to Reuters.

Talks between the US and Venezuela on easing sanctions, begun by the Trump administration in 2019, have been in progress since Russia invaded Ukraine as the US looked to secure new sources of energy. Both countries held their first high-level bilateral talks in years on March 5. which involved discussions on a temporary easing.