Sanctions

European Union fails to approve further Russia sanctions and a $106bn loan to Ukraine after Hungary refuses to agree.

The European Union has imposed sanctions on a new group of eight Russian individuals suspected of serious human rights violations, as EU member state Hungary vetoed additional sanctions on Moscow and a crucial loan for Ukraine on the eve of the war’s fourth anniversary.

The European Council on Monday said the individuals were members of the judiciary responsible ⁠for sentencing prominent Russian activists on politically motivated charges, as well as heads of penal colonies where political prisoners were held in inhuman and degrading conditions.

Under the sanctions, the individuals are banned from ⁠travelling to or transiting through the EU, their ⁠assets are frozen, and EU citizens and companies are prohibited from making funds available to them.

So far, 72 individuals have been hit by similar measures, including members of the judiciary, Ministry ⁠of Justice officials, and senior figures within Russia’s prison ⁠network.

The announcement came as the bloc failed to agree on a 20th sanctions package targeting the ‌Russian authorities more broadly and ‌a $106bn loan for Ukraine.

Hungary, the friendliest EU state to the Kremlin, vetoed the measures – which required unanimous approval within the EU bloc – following claims that Kyiv is delaying restarting the flow of Russian oil via a Soviet-era pipeline.

Kyiv says the Druzhba pipeline, which still carries Russian oil over Ukrainian territory to Europe, was damaged a month ago by a Russian drone strike, and it is fixing it as fast as it can.

Hungary and Slovakia, which have the EU’s only ⁠two refineries that still rely on oil via Druzhba, blame Ukraine for the delay.

Tensions were further exacerbated on Monday as Ukrainian security officials claimed to have launched a drone attack that sparked a fire at a Russian pumping station serving the Druzhba oil ⁠pipeline.

‘Message we didn’t want to send’

Hungarian Foreign Minister Peter Szijjarto told reporters ahead of the EU meeting that Budapest would block the loan as Kyiv had taken the “political decision” to “endanger our energy security”.

“The Druzhba pipeline has not been hit by any Russian attack, the pipeline itself has not been harmed, and currently there is no physical reason and no physical obstacle to reinstall the deliveries,” he said.

EU foreign policy chief Kaja Kallas called the failure to approve the new package a “setback and message we didn’t want to send today, but the work continues”.

Ukrainian Foreign Minister Andrii Sybiha said in a post on X that Hungary and Slovakia should not be allowed to “hold the entire EU hostage” and called on them to “engage in constructive cooperation and responsible behaviour”.

Maximilian Hess, an analyst at the Foreign Policy Research Institute, said the loan was “crucial for keeping Kyiv able to finance itself going forward in this conflict”.

Hess argued Hungarian Prime Minister Viktor Orban is using the issue to his political advantage ahead of elections on April 12.

“Orban is trying to make this a political issue, and he’s trying to blame his own economic difficulties on Ukraine [to boost] his chances in this election,” the analyst told Al Jazeera.

Independent polls suggest the right-wing nationalist leader is facing the most serious challenge yet in his 16 years as prime minister.

Feb. 23 (UPI) — A new package of European Union sanctions on Russia over its invasion of Ukraine, the 20th such set of measures, was stalled Monday after being blocked by Hungary, which is demanding Ukraine reopen a pipeline supplying it with Russian oil.

EU foreign policy chief Kaja Kallas said there was “not going to be progress” on the new round of sanctions at Monday’s meeting of EU foreign ministers in Brussels in time for the fourth anniversary of the war, which falls Tuesday.

“We are doing our utmost to have the sanctions package, through, and we are looking for ways how we can do it. But as we have heard some very strong statements from Hungary. I don’t really see they are going to change this unfortunately today,” she said.

“We should not tie together things that are not connected to each other at all. But let us listen to them explaining the reasons why they are blocking, and then see whether there are possibilities to overcome.”

Hungarian Foreign Minister Peter Szijjarto took to social media Sunday to make Hungary’s quid pro quo stance clear.

“The EU aims to adopt the 20th sanctions package at the Foreign Affairs Council. Hungary will block it. Until Ukraine resumes oil transit to Hungary and Slovakia via the Druzhba pipeline, we will not allow decisions important to Kyiv to move forward,” Sijjarto wrote on X.

The pipeline was damaged in a Russian attack, but Hungary insists Ukraine is dragging its feet getting it up and running again.

The financial services, trade and energy sanctions package drawn up by the European Commission would bring in a full maritime services ban for Russian crude oil, reducing its income from energy and making it more difficult to find customers. Access to oil tankers for Russia’s so-called “shadow fleet” will also be tackled, along with measures targeting its gas exports.

Transaction bans will be imposed on 20 more Russian banks as part of an effort to hobble Russian efforts to create its own payment systems to circumvent a ban on using the SWIFT international payments system while tightening restrictions on exports to Russia, including military-use goods and technologies, and import bans on Russian rare earth minerals, metals and chemicals, worth at least $1.1 billion in total.

Hungary’s block drew sharp criticism from Hungary’s EU partners with Swedish Foreign Minister Maria Malmer Stenergard telling Euronews it was a “shame” and a “disgrace.”

“Every delay that we have in the adoption of a sanctions package is a failure for Europe,” she said.

French Foreign Minister Jean-Noel Barrot said he was certain the sanctions package would pass, saying it was a matter of when, not if, while Polish Foreign Minister Radoslaw accused the government of Prime Minister Viktor Orban of leveraging anti-Ukrainian sentiment it had whipped up to boost its fortunes in elections in April.

Hungary announced Friday it would also block a $105 billion EU loan to Ukraine, accusing Ukraine of blackmailing Hungary by shutting off the pipeline and conspiring with Brussels and the Hungarian opposition to “create supply disruptions” in Hungary to push up fuel prices ahead of the election.

Orban previously agreed not to veto the loan, along with Slovakia and the Czech Republic, provided it was exempted from contributing financially.

Populist Orban has been in power since 2010 after a first term between 1998 and 2002 and has been president of his Fidesz, or Hungarian Civic Party, for the past 23 years.

Natalia Burdynska Schuurman defended her MsC thesis at the University of Edinburgh on Venezuela’s struggle for food security and food sovereignty amid wide-reaching US-led unilateral sanctions.

See below for the abstract, research questions, and the full text.

Abstract

As global development actors grapple with mounting pressures to feed the world population, growing enforcement of unilateral coercive measures jeopardizes efforts to advance Sustainable Development Goal 2 (SDG-2, “Zero Hunger”). This dissertation examines efforts to achieve food security in Venezuela, a state currently targeted by over 1,000 unilateral coercive measures, since its incorporation as a constitutional right in 1999 and how such processes have been shaped by economic sanctions targeting its oil industry introduced by the United States in 2015. It employs a literature review, secondary data analysis and archival research, adopting a political economy and world systems lens as well as a historical, relational and interactive approach to food sovereignty research, centering the perspectives and experiences of Venezuelan communities. This dissertation argues that unilateral sanctions targeting Venezuela’s oil industry triggered the collapse of a political economy of food security structurally dependent on Venezuela’s macroeconomic stability within a dollarized international trade and financial system, catalyzing efforts to rebuild Venezuela’s food and agricultural system that transformed the landscape of national food sovereignty construction. It is hoped that this dissertation yields new insights into challenges and prospects facing national efforts to construct food sovereignty and global efforts to achieve food security today.

[…]

Research questions

This dissertation answers the primary question: How have unilateral sanctions
targeting Venezuela’s oil industry shaped efforts to achieve food security in
Venezuela?

It addresses the following contributory questions: What was the state of affairs characterizing Venezuela’s food and agricultural system prior to 2015? What advances and setbacks have been identified concerning the national goal to achieve food security, as enshrined in Venezuela’s Constitution of 1999? How have financial and trade sanctions targeting Venezuela’s oil industry introduced by the United States in 2015 correlated with macroeconomic and food security trends in Venezuela? How have financial and trade sanctions targeting Venezuela’s oil industry impacted food production, distribution and access in Venezuela? How have state and societal actors engaged in efforts to achieve food security in Venezuela responded to these consequences?

BEIRUT, Lebanon, Feb. 18 (UPI) — The United States is tightening the noose on Iran-backed Hezbollah, stepping up pressure with new sanctions aimed at cutting it off from the global financial system and hindering its efforts to regroup and secure new funding sources.

Severely weakened by the recent war with Israel, the group is seeking to recover after losing much of its military capacity, senior leadership and key funding channels that once enabled it to become a powerful regional actor.

With the loss of Syria as its primary supply corridor from Iran after the ouster of Syrian President Bashar al-Assad, and of Venezuela as a suspected financial safe haven amid allegations of drug trafficking and money‑laundering operations, Hezbollah’s financial strains have emerged as one of its most pressing challenges.

Gone are the days when Hezbollah could generously support its popular base, paying reconstruction grants, salaries and stipends that helped it secure loyalty and maintain influence.

Today, the group is increasingly forced to prioritize its financial obligations, redirecting scarce resources to maintain core operations.

Limiting housing allowances or delaying payments to villagers whose homes were destroyed or damaged during the recent war in southern and eastern Lebanon, as well as Beirut’s southern suburbs, illustrates Hezbollah’s growing inability to meet its regular financial obligations.

Its efforts to secure funds, generate revenue and evade international sanctions were again targeted by the U.S. Treasury Department, which last week sanctioned Jood SARL, a Lebanon-based company linked to the group’s gold trading network.

The firm is accused of creating a chain of businesses to trade gold within Lebanon and potentially abroad, converting Hezbollah’s gold reserves into liquid funds.

The sanctions also extend to an Iran-based shipping network with connections involving Turkey and a Russian national based in Moscow, underscoring the global reach of Hezbollah’s revenue-generating activities.

According to Mohammad Fheili, a risk strategist and monetary economist, the U.S. Treasury is attempting to “pollute the ecosystem” Hezbollah uses to convert assets into operational cash.

“The immediate effect is less about ‘zeroing funding’ and more about raising the friction cost of money,” Fheili told UPI, explaining that the sanctions increase counterparty caution among dealers, shippers and intermediaries, and can effectively freeze access to “clean” trade channels.

He pointed out that procurement then becomes slower and more expensive. When networks are exposed, replacement channels tend to be costlier, involving more intermediaries, greater leakage and a higher risk of interception.

“Even when Hezbollah can move value through cash-heavy channels, everyone around it — licensed exchange houses, logistics firms and commodity traders — faces higher compliance and reputational risks,” Fheili said. “This, in turn, shrinks the pool of ‘willing’ facilitators.”

Some Lebanese businessmen, who have long acted as Hezbollah’s facilitators both in the country and across the diaspora, are reportedly becoming more cautious, fearing they could be targeted by U.S. sanctions and face civil or criminal penalties.

Ali Al-Amin, who runs the “Janoubia” website from southern Lebanon, which focuses on the Shiite community and Hezbollah, said those businessmen were initially drawn to Hezbollah’s rising power — not its ideology — for financial gain.

Al-Amin said that some people, particularly those with established operations in African countries, worry they could face pressure or become targets of the new financial restrictions on Hezbollah in the coming phase.

“They are distancing themselves and keeping away from Hezbollah to protect themselves,” he told UPI. “Being close to the group has become more costly than rewarding.”

He contended, however, that if the Americans had wanted to put Hezbollah — which he said has long enjoyed freedom of movement in Europe and Africa — in check, they could have done so a long time ago.

“It gave facilitators the impression that they had some kind of cover, even internationally,” he said.

Although Hezbollah has long been under U.S. and international sanctions as a designated terrorist organization, U.S. Treasury officials say the group has managed to evade many of these restrictions by maintaining a complex global financial network and using front companies to launder funds.

At the height of the Hezbollah-Israel war, Lebanon tightened security at Beirut-Rafic Hariri International Airport and indefinitely suspended flights to and from Iran to prevent Israeli strikes on the country’s main air and sea gateways, which Israel claimed were being used to smuggle funds and weapons to Hezbollah.

Rigorous security checks have been implemented at the airport, with stricter inspections on flights from Iraq and other designated destinations and thorough screenings of passengers and baggage. Even diplomatic pouches carried by visiting Iranian officials were denied clearance.

The measures forced Hezbollah to seek new smuggling methods, including passengers or pilgrims to Iraq’s holy sites in Najaf and Karbala carrying back cash money , or concealing funds in parcels from various countries.

Even if some of these attempts were successful, the smuggled funds remain limited and insufficient to meet Hezbollah’s actual needs, according to al-Amin, who said the group has “100,000 salaries to pay every month” and has shifted to dealing in gold and digital currencies.

He said that although Hezbollah’s followers are “worried and cautious,” they still view the group as a safety net, capable of leveraging its power and influence within public institutions “to secure government compensation, a hospital bed, or a school seat.”

“But the Shiites [in Lebanon] also realized that Hezbollah led them into disaster, leaving them without allies in Syria, Lebanon, or the wider world,” al-Amin said.

In a surprise move early this month, Kuwait placed eight Lebanese hospitals on its terrorism sanctions list, citing suspected involvement in or facilitation of terrorism — a move aimed at Hezbollah.

“This is significant because it extends ‘pressure targeting’ from financiers and front companies to service institutions such as healthcare, which are socially sensitive and politically symbolic,” Fheili said.

To confront the challenges stemming from the Israeli war, Hezbollah’s new leader, Sheikh Naim Qassem, has embarked on what appears to be a comprehensive restructuring of the group, sidelining some figures, promoting others and dissolving or merging units.

The resignation of Wafic Safa, head of the Liaison and Coordination Unit — a post that allowed him significant influence and interference over security, political and judicial authorities — was a clear sign of structural change within Hezbollah.

Safa, who survived an Israeli assassination attempt during the war, will be reassigned as part of the group’s internal restructuring that began after the cease-fire agreement, according to Kassem Kassir, a political analyst who specializes in Islamic movements and is close to Hezbollah.

With Safa gone, reports suggest that merging the group’s security units under a central authority has limited its dealings with the Lebanese state to political intermediaries.

Kassir said a new media unit, consolidating all the party’s outlets, has been set up under Ibrahim Mousawi, a Hezbollah deputy in parliament. Former minister and MP Mohammad Fneish was appointed to oversee political relations and preparations for the upcoming parliamentary elections scheduled for May.

“Hezbollah is preparing more measures for the post-war phase to showcase its stability and evolution, highlighting its civil society organizations — from scouting and cultural groups to women’s and educational institutions,” he told UPI. “This is intended to reaffirm its commitment to the state option, to political engagement, and to the decline of its military role.”

However, that commitment may not be enough.

“Hezbollah knows its military role is over, but still cannot admit it,” al-Amin said. “Moving from being a resistance and a regional power to something else requires courage.”

He said the group is evading “difficult questions” and has failed to reassess its relations with Iran and Lebanon now that it is no longer a regional power.

“It seems there is confusion within Hezbollah, and much of it is tied to Iran and what its future holds — whether there will be a [U.S.-Israeli] war against Iran or not,” he said.

WASHINGTON — President Biden is considering a ban on imports of Russian oil while weighing actions that would boost energy production by autocracies in the hopes of mitigating the effects on American consumers and global energy markets, U.S. officials said.

“What the president is most focused on is ensuring we are continuing to take steps to deliver punishing economic consequences on [Russian President Vladimir] Putin while taking all action necessary to limit the impact to prices at the gas pump,” White House Press Secretary Jen Psaki said Monday.

Until now, the economic strangulation of Russia by the West over its unprovoked invasion of Ukraine has avoided its robust energy sector, with administration officials suggesting that such a move could weaken the global economy.

But as Russia increases its unrelenting bombardment of Ukrainian cities, political pressure on the West has grown to do more to put pressure on Putin to stop the onslaught. U.S. officials said the Biden administration is considering easing restrictions on imports of oil from Venezuela to alleviate the void left by Russian oil bans, a politically problematic step.

It has also sought to convince Saudi Arabia, which has been under fire from U.S. and European officials over its human rights record, to boost oil production.

Biden spoke Monday for more than an hour with German Chancellor Olaf Scholz, French President Emmanuel Macron and British Prime Minister Boris Johnson, although the official White House readout of the conversation did not explicitly state that they discussed a ban on Russian energy.

According to the White House, “the leaders affirmed their determination to continue raising the costs on Russia for its unprovoked and unjustified invasion of Ukraine. They also underscored their commitment to continue providing security, economic and humanitarian assistance to Ukraine.”

Psaki said administration officials were also discussing whether the U.S. would send military aircraft to Poland should its leaders provide Soviet-era bombers to support Ukraine, but noted that the White House was not “preventing or blocking or discouraging” officials in Warsaw. “They are a sovereign country. They make their own decisions, but it is not as easy as just moving planes around,” she said.

The U.S. has been reluctant to get ahead of European allies in responding to Putin’s aggression. And while an oil embargo from Washington would have some effect, doing so in concert with Europe would deliver a far greater impact. Europe imports 4 million barrels of Russian oil a day, compared with 700,000 barrels imported daily by the U.S.

U.S. Secretary of State Antony J. Blinken said Sunday during an interview with CNN that the administration was indeed exploring the “prospect” of an energy ban “in a coordinated way” with allies, although he did not rule out the possibility that Washington could act on its own to bar Russian oil.

The administration may not have much of a choice. Members of both political parties have introduced bills in both houses of Congress to block such imports.

“We may have to pay more at the pump because of this attack and our bipartisan response, but it is worth it to ensure that Putin pays the price for his paranoid adventurism and his attack on a peaceful democracy,” Rep. Jimmy Panetta (D-Carmel Valley), who has co-sponsored a bill to ban Russian oil, said in a statement.

Rep. Lou Correa (D-Santa Ana), who supports the measure, said a Russian oil ban may only have limited success if the U.S. cannot persuade other countries to join the effort.

“I don’t believe Europe and some of the other countries are ready to say no to Russian energy, so that’s the challenge right now,” Correa said in an interview. “Not only does Russia have nukes, but also people have to buy their energy from the Russians.”

Congress is weighing an oil ban as it pushes to pass a measure to send Ukraine billions of dollars in emergency assistance. Senate Majority Leader Charles E. Schumer (D-N.Y.) on Monday called for passage of a $12-billion aid package this week, saying it “will provide both humanitarian and military assistance for Ukraine: funding for refugees, medical supplies, emergency food supplies, as well as funding to support weapons transfers into Ukraine, and help for our eastern flank NATO allies.”

In a letter to House Democrats on Sunday, House Speaker Nancy Pelosi (D-San Francisco) said Congress intended to pass $10 billion in emergency aid for Ukraine as part of a larger government funding measure. The House is also exploring legislation that would “further isolate” Russia from the world economy, Pelosi said.

Banning Russian oil imports would probably lead to higher prices at the pump in the U.S. and globally. Gas is averaging $4 a gallon nationwide, up from $2.77 a year ago, according to AAA. The average price of gas in California during that same period has risen from $3.75 to $5.34.

In a clear signal of how seriously the Biden administration is considering a Russian oil ban, U.S. officials traveled over the weekend to Caracas, Venezuela, for talks about potentially easing sanctions imposed on the South American nation by the Trump administration in 2019. President Trump took that step after declaring President Nicolas Maduro’s election victory a sham and recognizing another politician, Juan Guaido, as the country’s rightful leader, a position Biden has affirmed.

Those measures built upon similar sanctions imposed by President Obama, signaling the long history of trouble Washington has had with Caracas and its socialist leaders.

The Venezuela economy is reeling, despite sitting on some of the world’s largest oil reserves, and Maduro is likely eager to be free of the sanctions. However, his economy and many of his government agencies are deeply intertwined with Russian assets and advisors. Any lenience by the White House toward Maduro, even if it’s driven by a desire to crack down on Putin, could undercut Biden’s messaging about the existential threat that autocracies present to democracies.

Psaki on Monday batted away questions about a potential rapprochement with Caracas, telling reporters that any easing of sanctions was “leaping several stages ahead” of where talks currently stand.

Complicating matters has been Venezuela’s decision to imprison six executives from the Citgo oil company for the last four years. Five are U.S. citizens and the sixth a U.S. permanent resident. They were convicted in show trials on trumped-up embezzlement charges and other crimes, according to their families and human rights activists.

Psaki said discussions about the release of the men and sanctions relief were taking place “in different channels,” and not tied together.

Republicans, who have seized on the potential energy crisis to call for stepping up domestic fossil fuel production, have already made clear that they will hit the White House hard should it look to offset any ban on Russian oil by looking to foreign suppliers.

Florida Sen. Marco Rubio criticized Biden in a tweet Sunday, saying: “Rather than produce more American oil, he wants to replace the oil we buy from one murderous dictator with oil from another murderous dictator.”

United States Treasury Secretary Scott Bessent has claimed that Washington engineered a dollar shortage in Iran to send the rial into freefall and cause protests on the streets.

In December and January, Iran was faced with one of the biggest antigovernment protests the country has seen since the Islamic revolution of 1979, prompted by the severe economic crisis.

Protests over soaring prices in Iran began with shopkeepers in Tehran who shuttered their shops and began demonstrating on December 28, 2025, after the rial plunged to a record low against the US dollar in late December. The protests then spread to other provinces of Iran.

Supreme Leader Ayatollah Ali Khamenei’s government responded with force. More than 6,800 protesters, including at least 150 children, are thought to have been killed in a sweeping crackdown by the government on the protest movement.

So, how did Washington create a “dollar shortage” in Iran, ultimately causing the rial to tank? And what effect has that had on the Iranian people?

What is a ‘dollar shortage’?

A “dollar shortage” refers to when a country does not have enough US dollars to pay for things it needs from the rest of the world.

The US dollar is the main currency used in global trade, especially for oil, machinery and loan repayments, which means countries need a steady supply of it.

If exports fall and sanctions block access to the US financial system, dollars can become scarce. As a result, the local currency weakens, prices of imported goods rise, and inflation worsens.

In Iran, a “dollar shortage” was engineered by simultaneously blocking the two main channels of foreign exchange (FX) inflow: Oil exports and international banking access, said Mohammad Reza Farzanegan, an economist at Germany’s Marburg University. The US did this by imposing sanctions on Iranian oil, meaning anyone buying or selling it would be subject to punitive measures.

Given Iran’s dependence on oil for revenue, economic sanctions on its oil can create a severe FX constraint.

“By using secondary sanctions to threaten any global entity trading in dollars with Iran, the US traps Iran’s existing reserves abroad and prevents new dollars from entering the domestic market,” Farzanegan told Al Jazeera.

What has US Treasury Secretary Scott Bessent said?

Replying to a query about dealing with Iran at a Congressional hearing last week, Treasury Secretary Bessent described the US strategy to send the Iranian currency plunging.

“What we [have done] at Treasury is created a dollar shortage in the country,” Bessent said, adding that the strategy came to a “grand culmination in December, when one of the largest banks in Iran went under … the Iranian currency went into freefall, inflation exploded, and hence, we have seen the Iranian people out on the street.

“We have seen the Iranian leadership wiring money out of the country like crazy,” Bessent added. “So the rats are leaving the ship, and that is a good sign that they know the end may be near.”

Before this, speaking with Fox News at the World Economic Forum last month in Davos, Bessent explained the role US sanctions played in driving the recent nationwide protests.

“President Trump ordered Treasury … to put maximum pressure on Iran, and it’s worked,” he said. “Because in December, their economy collapsed. They are not able to get imports, and this is why the people took to the streets.”

In both instances, Bessent referred to his earlier remarks at the Economic Club of New York, in March last year, when he outlined how the White House would leverage President Donald Trump’s “maximum pressure” campaign to collapse Iran’s economy.

In his address there, Bessent said the US “elevated a sanctions campaign against [Iran’s] export infrastructure, targeting all stages of Iran’s oil supply chain”, coupled with “vigorous government engagement and private sector outreach” to “close off Iran’s access to the international financial system”.

What effect did the dollar shortage have in Iran?

In January, the Iranian rial was trading at 1.5 million to the dollar – a sharp decline from about 700,000 a year earlier in January 2025 and about 900,000 in mid-2025. The plummeting currency triggered steep inflation, with food prices an average of 72 percent higher than last year.

In 2018, during his first presidency, Trump withdrew from the 2015 Joint Comprehensive Plan of Action, a deal between Iran and global powers limiting Tehran’s nuclear programme in return for sanctions relief.

Since re-election last January, President Trump has doubled down on his so-called “maximum pressure” to cripple Iran’s economy and corner Tehran to renegotiate its nuclear and regional policies. Last month, Trump threatened a 25 percent tariff on countries doing business with Iran.

Through the rigorous blocking of Iran from the global financial system by creating a dollar shortage, the US pushed Tehran towards a severe “import compression, [and as a result, Iran] cannot pay for the intermediate goods and machinery required for domestic production”, said Farzanegan, the economist.

The US strategy, he said, “is particularly devastating because it leverages commercial risk management against humanitarian needs”. In short, Washington’s strategy “makes the small Iranian market a commercial liability” for any company, even if they are only dealing with medicine, for instance, Farzanegan added.

A research paper published by Farzanegan and Iranian American economist Nader Habibi last year found that the size of Iran’s middle class would have expanded by an annual average of approximately 17 percentage points, between 2012 and 2019, if it were not for US action.

In 2019, the estimated size of loss in the middle-class share of the population in Iran was 28 percentage points, the research found.

“People lost their purchasing power, and savings were wiped out,” the economist told Al Jazeera. “This is a long-term destruction of the country’s human capital.”

Besides the US action is the existing vulnerability of Iran’s economic structure, with factors like long-term mismanagement, high rates of corruption and over-reliance on oil revenues making it fragile.

While the US sanctions created external shock, a lack of domestic structural reforms left the government with “no fiscal space to cushion the blow”.

What is the US’s endgame here – and will it succeed?

Bessent’s admission that Washington deliberately created a “dollar shortage” signals the US’s shift towards a total economic warfare narrative.

“This is economic statecraft; no shots fired,” Bessent said at the WEF in Davos last month.

“This admission may complicate the US’s diplomatic standing, as it confirms that the humanitarian channels for food and medicine are often rendered useless if the entire banking system is being targeted for collapse,” Farzanegan said.

Bruce Fein, a former US associate deputy attorney general who specialises in constitutional and international law, told Al Jazeera that this type of economic coercion is “as common as the sun rising in the east and setting in the west”, pointing to economic sanctions against Russia, Cuba, North Korea, China and Myanmar.

However, unlike in other cases where the US has applied economic pressure, Farzanegan said Iran’s case is “a unique experiment due to the duration and intensity of the pressure”.

Unlike Russia, which has a more diversified export base and larger reserves, Iran has been facing varied forms of sanctions for decades since the supreme leader took power in 1979.

“Iran has a sophisticated internal mechanism for sanctions circumvention that makes the ‘dollar shortage’ a game of cat-and-mouse rather than a one-time shock,” the economist said.

With a US armada currently stationed in the Arabian Sea, the US and Iran are in talks to defuse tensions. The US wants three key things from Iran: To stop enriching uranium as part of its nuclear programme, to get rid of its ballistic missiles and to stop arming non-state actors in the region.

Ultimately, observers say, the US wants regime change in Iran.

But Fein said his experience shows that economic sanctions alone “seldom, if ever, topple regimes … Regime change comes externally only with the use of military force.

“Iran’s dollar shortage will not oust the mullahs or Revolutionary Guard,” he said, referring to Iran’s current administrative structure.

The impoverishment of Iranians will diminish, Fein told Al Jazeera, “rather than promote the likelihood of a successful revolution because day-to-day survival will be the priority”.

Caracas, February 11, 2026 (venezuelanalysis.com) – Venezuela’s oil output contracted to a two-year low following  Washington’s month-long naval blockade against the Caribbean nation’s crude exports.

The latest OPEC monthly report placed Venezuela’s January production at 830,000 barrels per day (bpd), down from 917,000 bpd in December, according to secondary sources. The figure is the lowest since May 2024. 

For its part, state oil company PDVSA reported 924,000 bpd produced in January, down from 1.12 million bpd the prior month. The direct and secondary measurements have differed over the years due to disagreements over the inclusion of natural gas liquids and condensates.

The output contraction was a result of the US Navy imposing a blockade on Venezuelan oil exports and seizing several tankers allegedly involved in Venezuelan crude shipments. The exhaustion of storage capacity forced PDVSA and partners to cut back production.

The blockade came on top of draconian sanctions that have stymied the Venezuelan oil industry for years. Since 2017, Washington has levied financial sanctions, an export embargo, secondary sanctions, and a host of other coercive measures aimed at strangling the country’s main source of foreign revenue.

Following the January 3 US military strikes and kidnapping of Venezuelan President Nicolás Maduro, Venezuelan oil began to flow once more under an arrangement imposed by the Trump administration. Commodity traders Vitol and Trafigura have been lifting Venezuelan crude, depositing proceeds in White House-administered bank accounts in Qatar, and offering cargoes to customers all over the world.

On Tuesday, the Venezuelan government denied a Bloomberg report that the country had shipped crude to Israel. According to the business outlet, the shipment would be delivered to the Bazan Group, Israel’s largest refiner. Bloomberg did not specify whether the Venezuelan crude cargo was purchased from Vitol, Trafigura, or another source. As part of the new US-imposed arrangement, the sale marks the first time Venezuelan oil will reach Israel since at least 2020, per Bloomberg. 

The Trump administration has sought to leverage its influence over the Venezuelan oil sector to pressure allies such as India to replace imports from US geopolitical rivals, including Russia and Iran. Indian public companies Indian Oil and Hindustan Petroleum are set to join private refiner Reliance Industries in purchasing Venezuelan oil, with 2 million barrels of Merey crude expected to be delivered in the coming weeks. Nevertheless, Venezuelan supplies are not expected to significantly alter global demand given the present output and the extra-heavy nature of Venezuelan crude blends.

US and European firms have likewise acquired Venezuelan cargoes in recent weeks.

For their part, Venezuelan acting authorities have courted foreign investment and enacted a pro-business overhaul of the country’s oil legislation. The reform offers lower taxes and royalties, as well as increased control over operations and sales, to private corporations, reducing the role played by the Venezuelan state.

Trump administration officials praised the oil reform for “eradicating restrictions” on private investment, while the US Treasury Department has issued several sanctions exemptions to boost US corporate involvement in the Venezuelan oil industry.

A January 29 license allowing US companies to purchase and market Venezuelan crude was followed up with a waiver on diluent exports to Venezuela on February 3. On Tuesday, the US Treasury published General License 48 permitting US exports of goods, technology and software for oil exploration to Venezuela.

The sanctions waivers demand that contracts be subjected to US law and forbid any transactions with companies from Russia, Iran, Cuba, North Korea, and China. They also mandate that payments be deposited in accounts determined by the US Treasury.

In early February, US officials confirmed that US $500 million from crude sales had been rerouted to the South American country, to be offered in foreign currency auctions by public and private banks. A further $300 million is expected in the coming days. 

However, the initial deal announced by Trump comprised 30-50 million barrels and an estimated $2 billion. Venezuelan authorities have not disclosed what portion of revenues the country will receive, while Trump has said the US will “keep some” of the income. 

Senior Trump administration officials have vowed to maintain control over Venezuelan oil exports for an “indefinite” period, with Secretary of State Marco Rubio claiming that the Venezuelan acting government headed by Delcy Rodríguez needs to submit a “budget request” before accessing the country’s oil proceeds.

The administration of United States President Donald Trump has sanctioned two leaders of Pacific island nations for alleged corruption, accusing them both of creating openings for China to increase its influence in the region.

On Tuesday, the US Department of State issued a notice alleging that the president of Palau’s Senate, Hokkons Baules, and a former mayor in the Marshall Islands, Anderson Jibas, had engaged in “significant corruption”.

Neither they nor their families will henceforth be allowed to enter the US, according to the statement.

“The Trump Administration will not allow foreign public officials to steal from U.S. taxpayers or threaten U.S. interests,” State Department spokesperson Tommy Pigott wrote on social media.

The State Department’s Bureau of International Narcotics and Law Enforcement (INL) also posted its support for the sanctions.

“Corruption that hurts U.S. interests will be met with significant consequences,” it said.

In both cases, the US credited the politicians’ actions with allowing the expansion of Chinese interests in the Pacific region.

The State Department alleged that Baules took bribes in exchange for supporting Chinese interests in Palau, an island in Micronesia that is the 16th smallest country in the world.

“His actions constituted significant corruption and adversely affected U.S. interests in Palau,” the US said in its statement.

Jibas, meanwhile, stands accused of “orchestrating and financially benefitting from” schemes to misuse the Bikini Resettlement Trust, a US-backed fund designed to compensate those negatively affected by nuclear bomb testing on the Bikini Atoll, part of the Marshall Islands.

The trust was worth nearly $59m in 2017, when the first Trump administration decided to hand control of the main resettlement fund to local authorities and relinquish its authority to audit.

Since then, the fund has emptied precipitously. As of February 2023, the trust had plummeted to a mere $100,000, and payments to Bikini Atoll survivors and descendants have ceased.

Critics have blamed Jibas, who was elected in 2016 to lead the Kili, Bikini and Ejit islands as mayor. He campaigned on having more local autonomy over the fund.

But reports in The Wall Street Journal and other news outlets accused him of misappropriating the funds for purchases including vacations, travel and a new pick-up truck.

In Tuesday’s announcement, the State Department connected Jibas’s alleged abuse to the spread of Chinese power in the Pacific and an increase in immigration to the US, two key issues in Trump’s platform.

“The theft, misuse, and abuse of the U.S.-provided money for the fund wasted U.S. taxpayer money and contributed to a loss of jobs, food insecurity, migration to the United States,” the department wrote.

“The lack of accountability for Jibas’ acts of corruption has eroded public trust in the government of the Marshall Islands, creating an opportunity for malign foreign influence from China and others.”

Both Palau and the Marshall Islands were US territories, occupied during World War II and granted independence in the late 20th century.

They both continue to be part of a Compact of Free Association with the US, which allows the North American superpower to continue military operations in the area and control the region’s defence.

They are also part of a dwindling list of countries that maintain diplomatic relations with Taiwan’s government, much to the ire of the People’s Republic of China.

Only about a dozen remain, and they are largely concentrated in Central America, the Caribbean or the Pacific islands.

But China has sought to pressure those smaller countries into rupturing their ties with Taiwan and recognising its government in Beijing instead.

The Asian superpower – often seen as a rival to the US – has also attempted to expand its sphere of influence to the southern Pacific, by building trade relations and countering US military authority in the area.

Baules, for example, is among the local politicians who have advocated for recognising Beijing’s government over Taipei’s, and he is a vocal proponent for increased ties with China.

Those shifting views have placed island nations like Palau and the Marshall Islands in the midst of a geopolitical tug-of-war, as the US struggles with China to maintain dominance in the region.

In other parts of the world, the US has also used sanctions to dissuade local officials from seeking closer ties with China.

Panamanian President Jose Raul Mulino, for instance, has accused the US embassy in his country of threatening to strip local officials of their visas, as the US and China jockey for influence over the Panama Canal.

Similar reports have emerged in neighbouring Costa Rica, where officials like lawmaker Vanessa Castro and former President Oscar Arias have accused the US of revoking their visas over ties to China.

But there have been other points of tension between the Pacific Islands and the US in recent years.

The Trump administration has withdrawn from accords designed to limit climate change and quashed international efforts to reduce emissions, straining ties with the islands, which are vulnerable to rising sea levels.

Still, the US State Department framed the sanctions on Tuesday as an effort to ensure local accountability and defend US interests in the region.

“The United States will continue to promote accountability for those who abuse public power for personal gain and steal from our citizens to enrich themselves,” it said.

“These designations reaffirm the United States’ commitment to countering global corruption affecting U.S. interests.”

Iran’s atomic energy chief says Tehran is open to diluting its highly enriched uranium if the United States ends sanctions, signalling flexibility on a key demand by the US.

Mohammad Eslami made the comments to reporters on Monday, saying the prospects of Iran diluting its 60-percent-enriched uranium, a threshold close to weapons grade, would hinge on “whether all sanctions would be lifted in return”, according to Iran’s state-run IRNA news agency.

Eslami did not specify whether Iran expected the removal of all sanctions or specifically those imposed by the US.

Diluting uranium means mixing it with blend material to reduce its enrichment level. According to the United Nations nuclear watchdog, Iran is the only state without nuclear weapons enriching uranium to 60 percent.

US President Donald Trump has repeatedly called for Iran to be subject to a total ban on enrichment, a condition unacceptable to Tehran and far less favourable than a now-defunct nuclear agreement reached with world powers in 2015.

Iran maintains it has a right to a civilian nuclear programme under the provisions of the nuclear Non-Proliferation Treaty, to which it and 190 other countries are signatories.

Eslami made his comments on uranium enrichment as the head of Iran’s Supreme National Security Council, Ali Larijani, prepares to head on Tuesday to Oman, which has been hosting mediated negotiations between the US and Iran.

Al Jazeera’s Ali Hashem, reporting from Tehran, said Larijani, one of the most senior officials in Iran’s government, is likely to convey messages related to the ongoing talks.

Trump said talks with Iran would continue this week.

Negotiations ‘very serious’

Both the US and Iran have given mixed signals about their progress in the negotiations. Iranian Foreign Minister Abbas Araghchi said Iran is “very serious in negotiations” and is eager to “achieve results”. However, he said, “There is a wall of mistrust towards the United States, which stems from America’s own behaviour.”

Iranian President Masoud Pezeshkian said the ongoing negotiations are an “important opportunity to reach a fair and balanced solution”, IRNA reported. He stressed that “Iran seeks guarantees for its nuclear rights” and the lifting of “unjust sanctions”, the agency added.

Trump, for his part, praised the latest round of talks on Friday as “very good” but continued to warn of “steep consequences” for Iran if it does not strike a deal.

“They want to make a deal as they should want to make a deal,” the US president said. “They know the consequences if they don’t.”

Before the two sides agreed to talks, Trump had repeatedly threatened Iran with a “far worse” attack than the US strikes on three Iranian nuclear facilities during June’s 12-day Israel-Iran war. He has escalated the pressure by deploying an aircraft carrier and accompanying warships to the Middle East.

Trump is expected on Wednesday to meet with visiting Israeli Prime Minister Benjamin Netanyahu, who is pushing the US to take a hardline stance in its negotiations with Iran, demanding not just concessions on its nuclear programme but also on its ballistic missiles and regional alliances.

Andreas Krieg, an associate professor in security studies at King’s College London, said the US and Iran appear to be “pivoting closer to a deal” than they were several weeks ago, even though there’s still a high risk of conflict.

“The [US] ‘armada’, as Trump calls it, is still in the area, so we still have that coercion going against the [Iranian] regime by the Americans,” Krieg told Al Jazeera. “But it seems to be fruitful in the way that the pressure works, and the Iranians have to make concessions.”

He added: “All the messaging from the Gulf countries – from Qatar, from Oman – from everyone involved, including from the Americans, has been very positive. And the Iranians’ feedback themselves was very positive.

“I think the problem that we have right now is how do we translate this momentum that we have right now on a strategic framework into the nitty-gritty of the details.”

Jan. 30 (UPI) — Six British ministers of Parliament, including two peers, no longer are sanctioned by China, British Prime Minister Keir Starmer announced Friday.

Starmer confirmed the sanctions — imposed over criticisms of China’s treatment of its Muslim-minority Uyghur population — immediately were lifted amid warming relations between China and Britain. He made the announcement during a diplomatic trip to Beijing.

“I raised that issue whilst I was here,” Starmer said while interviewed in China. “The Chinese are absolutely clear in their response: The restrictions no longer apply.”

Chinese President Xi Jinping said all British members of Parliament were welcome in China, Starmer told the BBC.

The sanctions included a now-lifted travel ban. Starmer said their removal affirms the effectiveness of his diplomatic approach to the matter.

The prime minister also said he hopes Xi will attend the 2027 G20 summit scheduled to take place in Britain.

China imposed the sanctions on nine Britons, including five Conservative Party ministers and two members of the House of Lords, in 2021 after they raised concerns about human rights violations by China against Uyghurs, a Muslim population in northwest China.

China’s population is more than 90% Han, while Uyghurs account for less than 1% of its people.

The affected MPs and peers said they find “no comfort” in the lifting of sanctions.

Sanctions remain in place for others, and the ministers said they “will not be silenced” on the matter.

China has pressured foreign governments to forcibly return Uyghurs and others to China, “where they are subject to torture and enforced disappearances,” U.S. Secretary of State Marco Rubio said in March.

Caracas, January 30, 2026 (venezuelanalysis.com) – The Venezuelan National Assembly has approved a sweeping reform of the country’s 2001 Hydrocarbon Law that rolls back the state’s role in the energy sector in favor of private capital.

Legislators unanimously endorsed the bill at its second discussion on Thursday, with only opposition deputy Henrique Capriles abstaining. The legislative overhaul follows years of US sanctions against the Venezuelan oil industry and a naval blockade imposed in December.

National Assembly President Jorge Rodríguez hailed the vote a “historic day” and claimed the new bill will lead oil production to “skyrocket.” 

“The reform will make the oil sector much more competitive for national and foreign corporations to extract crude,” he told reporters. “We are implementing mechanisms that have proven very successful.”

Venezuelan Acting President Delcy Rodríguez signed and enacted the law after the parliamentary session, claiming that the industry will be guided by “the best international practices” and undertake a “historic leap forward.”

Former President Hugo Chávez revamped the country’s oil legislation in 2001 and introduced further reforms in 2006 and 2007 to assert the Venezuelan state’s primacy over the industry. Policies included a mandatory stakeholding majority for state oil company PDVSA in joint ventures, PDVSA control over operations and sales, and increased royalties and income tax to 30 and 50 percent, respectively. Increased oil revenues bankrolled the Venezuelan government’s expanded social programs in the 2000s.

The text approved during Thursday’s legislative session, following meetings between Venezuelan authorities and oil executives, went further than the draft preliminarily endorsed one week earlier.

The final version of the legislation establishes 30 percent as an upper bound for royalties, with the Venezuelan government given the discretionary power to determine the rate for each project. A 33 percent extraction tax in the present law was scrapped in favor of an “integrated hydrocarbon tax” to be set by the executive with a 15 percent limit.

Similarly, the Venezuelan government can reduce income taxes for companies involved in oil activities while also granting several other fiscal exemptions. The bill cites the “need to ensure international competitiveness” as a factor to be considered when decreasing royalty and tax demands for private corporations.

The reform additionally grants operational and sales control to minority partners and private contractors. PDVSA can furthermore lease out oilfields and projects in exchange for a fixed portion of extracted crude. The new legislation likewise allows disputes to be settled by outside arbitration instances.

Thursday’s legislative reform was immediately followed by a US Treasury general license allowing US corporations to re-engage with the Venezuelan oil sector.

General License 46 (GL46) authorizes US firms to purchase and market Venezuelan crude while demanding that contracts be subjected to US jurisdiction so potential disputes are referred to US courts. The license bars transactions with companies from Russia, Iran, North Korea, or Cuba. Concerning China, it only blocks dealings with Venezuelan joint ventures with Chinese involvement.

Economist Francisco Rodríguez pointed out that the sanctions waiver does not explicitly allow for production or investment and that companies would require an additional license before signing contracts with Venezuelan authorities.

GL46 also mandates that payments to blocked agents, including PDVSA, be made to the US Foreign Government Deposit Funds or another account defined by the US Treasury Department.

Following the January 3 military strikes and kidnapping of Venezuelan President Nicolás Maduro, the Trump administration has vowed to take control of the Venezuelan oil industry by administering crude transactions. Proceeds from initial sales have been deposited in US-run bank accounts in Qatar, with a portion rerouted to Caracas for forex injections run by private banks. US Secretary of State Marco Rubio vowed that the resources will begin to be channeled to US Treasury accounts in the near future.

In a press conference on Friday, Trump said his administration is “very happy” with the actions of Venezuelan authorities and would soon invite other countries to get involved in the Caribbean nation’s oil industry. Rubio had previously argued that Caracas “deserved credit” for the oil reform that “eradicates Chávez-era restrictions on private investments.”

Despite the White House’s calls for substantial investment, Western oil corporations have expressed reservations over major projects in the Venezuelan energy sector. Chevron, the largest US company operating in the country, stated that it is looking to fund increased production with revenues from oil sales as opposed to new capital commitments.

Since 2017, Venezuela’s oil industry has been under wide-reaching US unilateral coercive measures, including financial sanctions and an export embargo, in an effort to strangle the country’s most important revenue source. The US Treasury Department has also levied and threatened secondary sanctions against third-country companies to deter involvement in the Venezuelan petroleum sector.

Venezuela’s interim President Delcy Rodriguez has signed into law a reform bill that will pave the way for increased privatisation in the South American country’s nationalised oil sector, fulfilling a key demand from her United States counterpart, Donald Trump.

On Thursday, Rodriguez held a signing ceremony with a group of state oil workers. She hailed the reform as a positive step for Venezuela’s economy.

“We’re talking about the future. We are talking about the country that we are going to give to our children,” Rodriguez said.

The ceremony came within hours of the National Assembly – dominated by members of Rodriguez’s United Socialist Party – passing the reform.

“Only good things will come after the suffering,” said Jorge Rodriguez, the assembly’s head and brother of the interim president.

Since the US military’s abduction of Venezuela’s former leader Nicolas Maduro and his wife Cilia Flores on January 3, the Trump administration has sought to pressure President Rodriguez to open the country’s oil sector to outside investment.

Trump has even warned that Rodriguez could “pay a very big price, probably bigger than Maduro”, should she fail to comply with his demands.

Thursday’s legislation will give private firms control over the sale and production of Venezuelan oil.

It would also require legal disputes to be resolved outside of Venezuelan courts, a change long sought by foreign companies, who argue that the judicial system in the country is dominated by the ruling socialist party.

The bill would also cap royalties collected by the government at 30 percent.

While Rodriguez signed the reform law, the Trump administration simultaneously announced it would loosen some sanctions restricting the sale of Venezuelan oil.

The Department of the Treasury said it would allow limited transactions by the country’s government and the state oil company PDVSA that were “necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil, by an established US entity”.

Previously, all of Venezuela’s oil sector was subject to sweeping US sanctions imposed in 2019, under Trump’s first term as president.

Thursday’s suite of changes is designed to make Venezuela’s oil market more appealing to outside petroleum firms, many of whom remain wary of investing in the country.

Under Maduro, Venezuela experienced waves of political repression and economic instability, and much of his government remains intact, though Maduro himself is currently awaiting trial in a New York prison.

His abduction resulted in dozens of deaths, and critics have accused the US of violating Venezuelan sovereignty.

Venezuela nationalised its oil sector in the 1970s, and in 2007, Maduro’s predecessor, Hugo Chavez, pushed the government to increase its control and expropriate foreign-held assets.

Following Maduro’s abduction, Trump administration officials have said that the US will decide to whom and under what conditions Venezuelan oil is sold, with proceeds deposited into a US-controlled bank account.

Concerns about the legality of such measures or the sovereignty of Venezuela have been waved aside by Trump and his allies, who previously asserted that Venezuelan oil should “belong” to the US.

Caracas, January 28, 2026 (venezuelanalysis.com) – International creditors have shown growing optimism to collect on defaulted Venezuelan debt in the wake of the January 3 US military strikes and kidnapping of President Nicolás Maduro.

According to Bloomberg, the volume of Venezuelan bonds traded increased tenfold since the start of the year. Securities have rallied to around 40 cents on the dollar, having hit lows of 1.5 cents on the dollar in the past.

A combination of defaulted bonds, unpaid loans and arbitration awards is estimated to total up to US $170 billion after years of accruing interest. The Maduro government began defaulting on debt service in 2017 as US sanctions crippled the Caribbean nation’s economy and ultimately blocked financial transactions altogether.

The Venezuelan Creditor Committee (VCC) expressed “readiness” to discuss a debt restructuring deal when authorized. The group brings together creditors including GMO, Greylock Capital, Mangart Capital, and Morgan Stanley, which hold over $10 billion in sovereign and state oil company PDVSA bonds.

Elias Ferrer Breda, financial analyst and director of Orinoco Research, told Venezuelanalysis that the “enthusiasm” means creditors feel a debt restructuring deal is “closer,” but warned that any agreement will hinge on US recognition of the Venezuelan government.

“The recognition, along with the lifting of primary sanctions, is the final obstacle,” he said. “There have been steps to reopen the US embassy in Caracas and a Venezuelan delegation headed by Félix Plasencia also visited DC.”

The first Trump administration recognized the self-proclaimed “interim government” led by Juan Guaidó as Venezuela’s legitimate authority in 2019, prompting Caracas to break diplomatic relations. After the parallel Guaidó administration dissolved in 2022, Washington transferred the recognition to the opposition-majority National Assembly whose term expired in 2021.

The small group of US-backed politicians retains control over Venezuelan-owned assets in the US. For its part, the Venezuelan government headed by Acting President Delcy Rodríguez has advocated a renewed diplomatic engagement with Washington. The two administrations have taken steps to reopen the respective embassies.

Ferrer, who also directs the Guacamaya media outlet, suggested that the State Department has no immediate plans to change its formal recognition of the defunct parliament. 

“However, there is a de facto recognition of the Rodríguez acting government being built,” he went on to add. “This will become de jure sooner or later; it could be a few months or even a couple of years.”

Venezuela’s inability to sustain debt service, including settlements with creditors, as a result of sanctions, saw many corporations pursue legal avenues to collect. Crystallex, ConocoPhillips and several other companies are set to benefit from the proceeds of the forced judicial auction of Venezuela’s US-based refiner CITGO.

Washington’s formal recognition of the Rodríguez acting administration could also pave the way for Venezuela to access about $4.9 billion in “special drawing rights” issued by the International Monetary Fund (IMF). The IMF created the liquidity instruments in 2021 to help governments deal with the Covid-19 pandemic but blocked Venezuela from accessing its share as it followed Trump’s lead in not recognizing the Nicolás Maduro government.

According to reports, US Treasury Secretary Scott Bessent recently held meetings with the heads of the IMF and the World Bank to discuss a possible re-engagement with the South American country.

For their part, Venezuelan authorities have expressed a willingness to engage with creditors in the past, but US sanctions preempted any meaningful engagement.

Caracas’ debt also includes long-term oil-for-loan agreements with China. However, with Washington’s naval blockade recently blocking China-bound crude shipments, Beijing has reportedly sought assurances of the repayment of debts estimated at $10-20 billion.

Caracas, January 29, 2026 (venezuelanalysis.com) – US Secretary of State Marco Rubio defended the Trump administration’s January 3 attack on Venezuela and kidnapping of President Nicolás Maduro during a Senate hearing on Wednesday.

“[Having Maduro in power] was an enormous strategic risk for the United States,“ Rubio said in his testimony to the Senate Committee on Foreign Relations. “It was an untenable situation, and it had to be addressed.”

The Trump official claimed that the military operation aimed to “aid law enforcement” and did not constitute an act of war. He likewise emphasized the White House’s concern about Venezuela allegedly being a “base of operations” for US geopolitical rivals Iran, Russia, and China.

Rubio faced criticism from multiple senators, with Rand Paul arguing that the White House would consider a similar attack directed against the US as an act of war. Despite widespread criticism from Democrats and a handful of Republicans, efforts to pass War Powers resolutions have been narrowly defeated in both the Senate and the House of Representatives.

Maduro and First Lady Cilia Flores pleaded not guilty to charges including drug trafficking conspiracy in a New York federal court on January 5. US officials have never presented evidence tying high-ranking Venezuelan leaders to narcotics activities, and specialized agencies have consistently found the Caribbean nation to play a marginal role in global drug trafficking.

The Venezuelan government, led by Acting President Delcy Rodríguez, has repeatedly denounced the US attack and demanded the release of Maduro and Flores. At the same time, Rodríguez and other officials have advocated for renewed diplomatic engagement to settle “differences” with Washington.

The January 3 strikes, which killed 100 people, have drawn widespread condemnation in Latin America and beyond. A recent Progressive International summit in Colombia called for a joint regional response against US aggression.

During Wednesday’s hearing, Rubio reiterated the US government’s plans to control the Venezuelan oil sector and impose conditions on the acting Rodríguez administration. He added that the White House is seeking stability in the South American country ahead of a “democratic transition.”

Rubio additionally confirmed that Washington is administering Venezuelan oil sales, with proceeds deposited in US-controlled bank accounts in Qatar before a portion is rerouted to Caracas. He added that at some point the funds will run through Treasury Department accounts in the United States.

Democratic senators questioned the legality and transparency of the present arrangement. The Secretary of State further claimed that Caracas would need to submit a “budget request” before accessing its funds.

The initial deal reportedly comprised some 50 million barrels of oil, worth around $2 billion, that had accumulated due to a US naval blockade of Venezuelan exports. After a reported $300 million were turned over to Venezuelan private banks last week, the Venezuelan Central Bank announced that a further $200 million will be made available in early February.

Venezuelan banks are offering the foreign currency in auction to customers, with officials vowing  priority for imports in the food and healthcare sectors. 

According to Reuters, the US Treasury Department is preparing a general license to allow select corporations to engage in oil dealings with Caracas. Since 2017, the Venezuelan oil industry has been under wide-reaching unilateral coercive measures, including financial sanctions, an export embargo, and secondary sanctions.

In his address, Rubio went on to state that Venezuelan authorities “deserve credit for eradicating Chávez-era restrictions on private investment” in the oil industry, in reference to a recent overhaul of the country’s 2001 Hydrocarbons preliminarily approved last week. He added that a portion of oil revenues will be used for imports from US manufacturers.

On Tuesday, Acting President Rodríguez announced during a televised broadcast that Venezuela was importing medical equipment from the US using “unblocked funds.” 

The Venezuelan leader emphasized the importance of relations based on mutual respect with the US and rejected claims that her government is subject to dictates from foreign actors. She affirmed that there are open “communication channels” with the Trump administration and collaboration with Rubio on a “working agenda.”

The acting authorities in Caracas have sought to promote a significant rebound of crude production by offering expanded benefits to private investors as part of the reform bill. Expected to be finally approved in the coming weeks, the new law abrogates provisions introduced under former President Hugo Chávez to ensure majority state control over the oil sector in favor of flexible arrangements granting substantial autonomy to corporate partners.