U.S. May Expand Sanctions on Venezuelan Oil Shipments

PDVSA-operated oil terminal (file image)

Published Feb 15, 2019 10:59 AM by The Maritime Executive

The political crisis in Venezuela continues to affect tanker shipping in the Gulf of Mexico and beyond, with U.S. pressure on the government of Venezuelan president Nicolas Maduro creating increasing difficulties for the country's petroleum imports and exports. 

A raft of new developments could bring further disruption to historical patterns of petroleum trade with Venezuela. U.S. refiner Citgo, which is controlled by Venezuelan state oil company PDVSA and is the largest American importer of Venezuelan crude, is said to be considering a bankruptcy filing; the White House is holding internal discussions on new sanctions measures that would affect overseas buyers of Venezuelan crude, not just American entities; and PDVSA is sending more oil on long-haul deliveries to Russia, China and India, which all have long-term trade relationships with Caracas.

Opposition leader Juan Guaido, the head of Venezuela's National Assembly and the self-declared interim president of the country, seeks to remove Maduro from power, with the backing of the United States. The White House has structured sanctions measures in a manner designed to preserve Venezuelan assets for a future Guaido-led interim government, and permits American entities to buy PDVSA's oil - so long as they deposit the payment in a blocked account, for later use by a democratically-elected government. In addition, USAID is shipping aid to the Colombian border for delivery to Venezuela, and is coordinating with Guaido's opposition movement on the possibility of airborne deliveries into Venezuelan territory. So far, Maduro's administration has refused to allow American truck convoys across the Colombian border and into the country. 

The American pressure campaign may be working: Maduro confirmed Thursday that his foreign minister met recently with the U.S. special envoy to Venezuela, Elliott Abrams, and invited him to visit for high-level talks. “If he wants to meet, just tell me when, where and how and I’ll be there,” Maduro told the AP. Abrams has previously demanded Maduro's resignation, leading to speculation that the talks could be negotiations over the terms of Maduro's exit.