The sweeping sanctions on Venezuela’s oil industry were first imposed by the Trump administration in 2019 following Maduro’s re-election victory, which the US and other Western governments rejected.

While Maduro has honoured some commitments under last year’s deal, he has failed to meet others, including allowing the opposition to run the candidate of its choice against him in the July 28 presidential election, senior US officials said.

As a result, the administration plans to allow the current six-month general license to expire without renewal just after midnight EDT, said State Department spokesperson Matthew Miller.

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“We are concerned that Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society,” Miller said in a statement.

Multiple opposition allies and activists have faced arrest in recent months, which sources close to the ruling party have said is likely a government reaction to declining domestic support for Maduro. Maduro still enjoys support from the military and from Cuba, Russia and China.

However, Jorge Rodriguez, the head of Venezuela’s government-allied legislature, said Caracas had met the conditions of last year’s deal. The reinstatement of sanctions was “a harmful action against Venezuela,” he told a press conference later on Wednesday.

The withdrawal of the most significant element of US sanctions relief marks a major step back from US President Joe Biden’s policy of re-engagement with the Maduro government.

But the Biden administration is stopping short of a full return to the “maximum pressure” campaign waged under former US president Donald Trump.

And one US official said the move “should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections,” adding that Washington would continue to engage with Maduro’s representatives.

Weighing on the US decision have been concerns about whether snapping back sanctions could spur higher global oil prices or increase the flow of Venezuelan migrants to the US-Mexico border as Biden campaigns for re-election in November.

A senior administration official said internal discussion touched on a range of issues but the final decision was based fundamentally “on the actions and non-actions of the Venezuelan authorities”.

Biden’s aides had struggled to craft an approach that would punish Maduro but not hurt US interests with the expiration of the license that has allowed Venezuela to freely sell its crude, US sources said.

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Venezuelan officials have insisted they are ready for any scenario and can weather renewed sanctions.

“We are open (for business), willing to keep progressing along with all foreign companies that want to come,” Oil Minister Pedro Tellechea told reporters after the US announcement. “Venezuela is ready to secure the stability of global oil markets that we need so much.”

Among the top US concerns about Venezuela’s electoral conditions has been the crackdown on Maduro’s political opponents, especially blocking the leading opposition candidate Maria Corina Machado from running.

Venezuelan authorities have maintained an election ban on Machado, who resoundingly won the opposition primary last October, and the opposition is currently holding internal negotiations about who could run as a substitute.

Additional reporting by Agence France-Presse