The Biden administration said it would not renew a license set to expire early on Thursday that had broadly eased Venezuela oil sanctions, moving to reimpose punitive measures in response to President Nicolas Maduro’s failure to meet his election commitments.

Just hours before the deadline, the US Treasury Department announced on Wednesday that it had issued a replacement license giving companies 45 days to “wind down” their business and transactions in the OPEC country’s oil and gas sector.

Washington had repeatedly threatened in recent months to reinstate energy sanctions unless Maduro made good on his promises that led to partial US sanctions relief from October, following a US-backed election deal between the government and the Venezuelan opposition.

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 honored 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.

“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.

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 reelection 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.”

STRUGGLE TO CRAFT SANCTIONS DECISION

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.

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.”

Venezuela’s oil exports in March rose to their highest level since early 2020 as customers rushed to complete purchases ahead of the predicted expiration of the license, Reuters reported this month.

Even as it left the door open for companies to apply for specific licenses on a case-by-case basis, Treasury warned, however, that “entering into new business, including new investment, that was previously authorized” under the expiring general license will not be permitted.

Since the easing of sanctions in October, Venezuela has made only slow progress toward rebuilding its production capacity, with its crippled infrastructure and lack of fresh investment continuing to place limits on what it can achieve.

The withdrawal of the license is expected to put a ceiling on Venezuela’s crude production growth unless Washington grants enough individual authorizations to make up for it, analysts said.

Any activity under the expiring general license will have to be completed by May 31.

Certain US authorizations separate from that license will be untouched, including permission given to Chevron (CVX.N), opens new tab since 2022 to sell oil in the US from its Venezuela joint ventures as well as existing approvals for European firms to take Venezuelan oil.

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.