WASHINGTON/HOUSTON, April 15 (Reuters) - The U.S. will

not renew a temporary license set to expire on Thursday that

widely eased sanctions on Venezuela's oil and gas sector, a

State Department spokesperson said, unless progress is made by

President Nicolas Maduro on commitments for free and fair

elections this year.

The U.S. has been concerned about Venezuela's electoral

process and what it sees as Maduro's failure to meet his main

promises for the July 28 presidential elections.

"Absent progress by Maduro and his representatives in terms

of implementing the road map's provisions, the United States

will not renew the license when it expires on April 18, 2024,"

the spokesperson said on Monday.

The Biden administration holds out little hope that Maduro

will make enough concessions before Thursday's deadline to

satisfy U.S. demands. U.S. and Venezuelan officials met secretly

in Mexico last Tuesday, but a source familiar with the talks

said they made little or no progress on narrowing their

differences.

The lack of a renewal of the current license would not rule

out the possibility that the U.S. could issue a new and more

restrictive license to replace it.

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 U.S. license, Reuters

reported this month.

Venezuela's state-run oil firm, PDVSA, has said it is

prepared for any scenario, including the return of full oil

sanctions.

U.S. President Joe Biden's aides are still discussing a

range of options ahead of the expiration on Thursday of the

temporary U.S. license that has allowed Venezuela to freely sell

its crude, according to people familiar with the matter.

The Biden administration is determined to punish Maduro's

government in some way and is deliberating on how far to go in

withdrawing sanctions relief, though it is expected to stop

short of a full return to the Trump-era "maximum pressure"

policy.

Possible steps under serious consideration would be to allow

Venezuela to continue selling its crude on world markets but to

reimpose a ban on use of U.S. dollars in such transactions,

requiring Venezuela to switch to other currencies and expand

barter arrangements and swaps, according to people briefed on

the discussions.

That option could expand the Venezuelan banking sector's

role in oil sales if transactions in domestic currency are the

only ones authorized.

U.S. officials are not planning to roll back the

authorization given to Chevron ( CVX ) in 2022 to sell oil in

the U.S. from its Venezuela joint ventures, which renews

automatically each month. Authorizations to European oil

companies to take Venezuelan oil also are expected to remain,

the sources said.

Weighing on current U.S. deliberation are concerns about

whether reimposing sanctions on Venezuela's energy sector could

spur higher global oil prices and increase the number of

Venezuelan migrants heading for the U.S.-Mexico border as Biden

campaigns for re-election in November.

The U.S. provided the partial sanctions relief in October in

response to an election deal reached in Barbados between

Maduro's government and the opposition. The agreement included

the right of the opposition to choose its own presidential

candidate.

The U.S. Treasury Department separately on Monday extended

through Aug. 13 a license that protects Venezuela-owned refiner

Citgo Petroleum from creditors.

Venezuela's opposition is subsumed in internal negotiations

about how to run a candidate in the July 28 election and who

that candidate could be.

Maria Corina Machado, who resoundingly won the opposition

primaries last October, cannot run because she is barred from

holding public office, a decision she says is unfair. Machado

named Corina Yoris as her successor, but the 80-year-old

academic was also unable to register her candidacy.

Two opposition candidates were able to register and possible

substitutes can be named until April 20.