US hits Venezuela’s state oil company with sanctions

The United States has ramped up pressure on President Nicolás Maduro’s government in Venezuela by imposing sanctions on the state-owned oil company PDVSA.

The US Treasury said that all of PDVSA’s assets subject to its jurisdiction were blocked, including Citgo – the company’s US refining subsidiary.

While Citgo will be able to continue trading throughout the sanctions, any money paid to its parent will be put into a blocked, interest-bearing account located in the US.

The sanctions will force PDVSA to find other markets for its oil or through different routes into the US using intermediaries. Venezuela currently sends 41% of its oil exports to the US.

Oil Analyst Anas Alhajji said Venezuela would probably still be able to ‘borrow a page from Iran’s playbook’ in terms of finding ways around the sanctions.

It is hard to monitor,” he said. “Venezuelan crude might end up in the US, and the Maduro regime will get paid by third parties who will work as middlemen by rebranding the origin of the oil.”

The move comes after the US and more than 20 countries recognised Venezuela’s opposition leader Juan Guaidó as the country’s interim president, as momentum builds towards the breakdown of Maduro’s heavily criticised regime.

“Today’s designation of PDVSA will help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela,” said US Treasury Secretary Steven Mnuchin.