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 said in January it will allow the expiry of 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 U.S., which first imposed oil sanctions on Venezuela in

2019, in October granted the license that 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 barely grow through 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 larger 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 might still

decline but not collapse, Monaldi said.

Maduro and the opposition last year signed a pact 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.

Chevron's ( CVX ) Vice President of Midstream Colin Parfitt told

Reuters on Tuesday risks related to the license in Venezuela

remain. However, the company plans to continue producing

Venezuelan oil and exporting to the U.S. "as long as we have the

license."

Chevron ( CVX ) does not have long-term incentives to invest in

Venezuela under the current license, Parfitt added, so any

production increase will remain limited by that.