US Considers Possible Sanctions against Venezuela Oil Sector

News ID: 1427571 Service: World
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TEHRAN (Tasnim) – The United States is considering possible sanctions on Venezuela’s vital energy sector, including state oil company PDVSA, senior White House officials said.

The idea of striking at the core of Venezuela’s economy, which relies on oil for some 95 percent of export revenues, has been discussed at high levels of the Trump administration as part of a wide-ranging review of US options, but officials said it remains under debate and action is not imminent.

The officials, speaking on condition of anonymity, told Reuters the United States could hit PDVSA as part of a “sectoral” sanctions package that would take aim at the OPEC nation’s entire energy industry for the first time, Reuters reported.

But they made clear that the administration is moving cautiously, mindful that if such an unprecedented step is taken it could deepen the country’s economic and social crisis, in which millions suffer food shortages and soaring inflation. Two months of anti-government unrest has left more than 60 people dead.

Another complicating factor would be the potential impact on oil shipments to the United States, for which Venezuela is the third largest oil supplier after Canada and Saudi Arabia. It accounted for 8 percent of US oil imports in March, according to US government figures.

“It’s being considered,” one of the officials told Reuters, saying aides to President Donald Trump have been tasked to have a recommendation on oil sector sanctions ready if needed.

“I don’t think we’re at a point to make a decision on it. But all options are on the table. We want to see the bad actors held to account.”

The US deliberations on new sanctions come against the backdrop of the worst protests faced yet by socialist President Nicolas Maduro.

Since Trump took office in January, he has stepped up targeted sanctions on Venezuela, including on the vice president, the chief judge and seven other Supreme Court justices. He has pressed the Organization of American States to do more to help resolve the crisis.

While Trump has taken a more active approach to Venezuela than his predecessor Barack Obama, he has so far stopped short of drastic economic moves that could hurt the Venezuelan people and give Maduro ammunition to accuse Washington of meddling.

The two administration officials said the United States is also prepared to impose further sanctions on senior officials it accuses of corruption, drug trafficking ties and involvement in what critics see as a campaign of political repression aimed at consolidating Maduro’s rule.

But broad measures against the country’s vital oil sector – for which the United States is the biggest customer - would significantly ratchet up Washington’s response. The United States has imposed sectoral sanctions against Russia’s energy, banking and defense industries over Moscow’s involvement in Ukraine’s separatist conflict.

The officials declined to specify the mechanisms under consideration and said the timing of any decision would depend heavily on developments on the ground in Venezuela.

Possibilities could include a blanket ban on Venezuelan oil imports and preventing PDVSA from trading and doing business in the United States, which would have a severe impact on PDVSA's US refining subsidiary Citgo.

A more modest approach, however, could be to bar PDVSA only from bidding on US government contracts.

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