US sanctions Venezuela oil firm, escalating pressure on Maduro

January 29, 2019 09:11
White House National Security Adviser John Bolton and Treasury Secretary Steven Mnuchin announce economic sanctions against Venezuela and the Venezuelan state-owned oil giant PdVSA during a press briefing in Washington on Monday. Photo: Reuters

The Trump administration on Monday imposed sweeping sanctions on Venezuela's state-owned oil firm PDVSA, stepping up pressure on the country’s embattled socialist president, Nicolas Maduro.

"We have continued to expose the corruption of Maduro and his cronies and today’s action ensures they can no longer loot the assets of the Venezuelan people,” US national security adviser John Bolton said at a White House briefing, Reuters reports.

President Donald Trump’s order freezes the US-based assets of PDVSA, Venezuela’s largest source of revenue and the owner of US refining arm Citgo Petroleum, the OPEC member’s most important foreign asset.

The sanctions ratchet up pressure against Maduro to step aside and turn over power to Juan Guaido, the Venezuelan opposition leader who proclaimed himself interim president last week and was immediately recognized by the US and a host of other countries.

US officials said the sanctions on PDVSA are intended to prevent Maduro’s government from siphoning off funds from the oil company to maintain his grip on power.

Bolton said Monday’s announcement would block Maduro from accessing PDVSA assets worth US$7 billion and cost him US$11 billion in lost export proceeds over the next year.

The United States stopped short, however, of imposing a ban on imports of Venezuelan oil, a move that US oil refiners had opposed.

Treasury Secretary Steven Mnuchin said Citgo in the United States would be able to continue to operate, provided funds go to a blocked account.

He said oil supplies were sufficient to ensure no significant impact on US gas prices in the short term and that the Treasury Department would issue temporary licenses to permit some transactions with PDVSA.

Even though the Venezuelan military has shown no sign of abandoning Maduro, Bolton said: “Our assessment based on numerous contacts on the ground is that the rank and file of the Venezuelan military is acutely aware of the desperate economic conditions in the country and we think they look for ways to support the National Assembly government.”

Countries around the world have recognized Guaido as Venezuela’s rightful leader, and the United States vowed to starve Maduro’s administration of oil revenue after he was sworn in on Jan. 10 for a second term that was widely dubbed illegitimate.

Maduro says the United States is promoting a coup against him and promised to stay in office, backed by Russia and China, which have bankrolled his government and fought off efforts to have his government disavowed by the United Nations, the report noted.