by Jack McEvoy

The Biden administration has proposed a deal that would ease sanctions on Venezuela, allowing Chevron to pump oil in the country after the consortium agreed to the biggest production cut since the COVID-19 pandemic, the Wall Street Journal reported on Wednesday.

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The U.S. will unfreeze hundreds of millions of dollars in Venezuelan state funds held in U.S. banks in exchange for allowing Chevron to produce oil on its land, according to The Wall Street Journal cited sources familiar with the deal as saying. The proposal comes after OPEC agreed earlier on Wednesday to cut oil production by 2 million barrels a day, a decision the White House called “short-sighted.” statement.

According to the Wall Street Journal, the Biden administration believes that if Chevron and other U.S. companies are allowed to resume work in Venezuela, a founding member of the Organization of the Petroleum Exporting Countries, it could signal an increase in global supply, which could lower oil prices.OPEC and its allies led by Russia cut output to keep prices stable as they fear oil demand could fall amid growing global concern economic recession.