After what has been described as a fraudulent vote that took power from Venezuela’s democratically elected lawmakers, Venezuelan President Maduro has been banned from the United States, his US assets frozen, and Americans have been prohibited from doing any business with him. The sanctions were put into place by the Treasury Department on Monday, sending a clear message of the Trump administration’s opposition to Maduro’s regime.
On Monday, National Security Adviser McMaster labelled Maduro as “not just a bad leader”, but a dictator.
The White House did however stop short of its most serious potential action, which would be banning Venezuelan oil imports; a move some say would be the catalyst for further economic collapse in the South American country; worsening the already dreadful humanitarian crisis for Venezuelans citizens. Analysts have said the current sanctions will not affect oil flows to or from Venezuela.
“Our objective is not to do anything that hurts the people of Venezuela,” Mnuchin said
Maduro recently declared a sweeping victory in a vote that will allow him to further consolidate his power; a vote that much of the world, and many of Venezuela’s own citizens, have called an assault on democracy. At least 10 people were killed in unrest during the vote on Sunday; bringing the death toll of anti-government protests to more than 120.
“[Sunday’s] illegitimate elections confirm that Maduro is a dictator who disregards the will of the Venezuelan people,” Treasury Secretary Steven Mnuchin said in a statement announcing the latest sanctions on the Latin American country.
It’s currently unclear exactly what assets Maduro has in the US. Secretary Mnuchin declined to provide reporters with additional details during the White House briefing on Monday. Venezuela’s Vice President Tareck El Aissami, who was sanctioned in February, is estimated to have foreign assets of $500 million.
In the week leading up to the vote, the Trump administration imposed sanctions on 13 senior officials within Venezuela’s government, military and state oil company PDVSA. The US had hoped the sanctions would deter Maduro from following through with the vote to establish the constituent assembly. Among those sanctioned were army chief Jesus Suarez, PDVSA vice president for finance Simon Zerpa, national police director Carlos Perez, and national elections director Tibisay Lucena.
When asked about oil sanctions against Venezuela, Secretary Mnuchin said the US would consider all options. Experts have argued that oil and financial sanctions may be the only way to make the Venezuelan government feel economic pressure. Potential US sanctions on the sale of light crude to Venezuela’s oil company, PDVSA, would hurt its already weak refining network.
In the recent years Venezuela, which has the world’s largest oil reserves, has increased imports of oil and products from the US amid low oil prices and the lack of maintenance at its refineries. Venezuela has also been a key source of heavy crude for US refiners. US Imports of Venezuelan crude in the first four months this year averaged 724,000 barrels per day.
So far PDVSA has imported 87,000 barrels a day of US refined products in order to make up for its ailing refining network. This year PDVSA has operated at less than half its capacity due to a number of issues, including the lack of crude oil.
Should the US decide to sanction Venezuela’s oil industry, there is the potential for collateral damage to the United States. Any trade embargo could raise gas prices and decrease the profits for several major refiners within the US. A decrease in Venezuelan exports also has the potential to raise global oil prices, boosting the economies of Iran and Russia who have been hurt by the low global price.
Maduro has repeatedly said that current threats from the Trump administration would not be heeded. In a televised speech on Monday, Maduro said that “the emperor Donald Trump took decisions against me that show his desperation and hate.”
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