HOUSTON, March 5 (Reuters) - A possible reimposition of

U.S. oil sanctions on Venezuela next month would stagnate the

OPEC-member country's crude output, wiping out the small gains

it has achieved in recent years, analysts said on Tuesday.

Washington has said it will allow to expire a temporary

license it granted last year to Venezuela as part of

negotiations for a fair presidential election if the government

does not allow an internationally observed election with

participation of a candidate chosen by the opposition.

The license has allowed state oil company PDVSA to resume

crude exports to some of its established customers, ease price

discounts and slowly boost oil output to 783,000 barrels per day

(bpd) last year, compared with 569,000 bpd in 2020.

Production is expected to grow slightly between 2024 and

2026, declining from then on if oil sanctions are fully

restored, said Francisco Monaldi, an expert on Latin American

energy policy with Rice University's Baker Institute.

If the temporary license is extended or granted again at

least partially, that would fuel a modest increase, driving

output to slightly above 1 million bpd from 2025 on, according

to a forecast by consultancy Rystad Energy shown by Monaldi at a

conference organized by Harvard University.

"There is still room for a scenario where U.S. license 44,

granted in October, is renewed at least partially if (Venezuelan

President Nicolas) Maduro does the bare minimum to meet the

electoral conditions set as part of the Barbados agreement,"

Monaldi said.

It remains unclear what will happen with other

authorizations granted by Washington since 2022, including to

producers Chevron ( CVX ), Eni, Repsol and

Maurel & Prom.

If those individual licenses remain, production would still

decline but not collapse, Monaldi said.

Maduro and the opposition last year signed an agreement in

Barbados setting conditions for a presidential election later

this year. They included international observation, the

withdrawal of legal bans to opposition candidates and guarantees

for a transparent process. Maduro has failed to progress on

most.