U.S. oil sanctions on Venezuela are due to expand before a critical vote in the Latin American country in April, according to a new report by Bloomberg.
An anonymous official from the U.S. State Department said no decision had been made regarding the upcoming round of punitive measures against President Nicolas Maduro's regime, however. Officials are reportedly weighing the effects of the proposed measures on Caracas and ordinary people.
The White House favors swift sanctions, regardless of the election schedule, the source said. One proposed measure would target oil sales further, and another would take financial sanctions on the fossil fuel sector even further.
Maduro is seeking a second six-year term to complete his "21st century socialism" plan, which has plunged the country into recession. The fund shortage also corresponds to three years of low oil prices, severely reducing the federal government's access to cash.
According to data by the EIA compiled by Bloomberg, Venezuela's imports of heavy naphtha from the U.S.-all of which comes from Gulf Coast refineries-are some 2 million barrels per month, and a stoppage of naphtha would seriously interrupt Venezuela's oil industry, which relies on the additive to improve the flow of heavy oil through its pipelines.
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Earlier, U.S. Secretary of State Rex Tillerson said the U.S. was considering extending sanctions against Venezuela to include all imports of Venezuelan crude and exports of U.S. refined products to the South American country. Currently, sanctions target separate individuals from the Maduro regime and ban U.S. banks and other institutions from buying Venezuelan debt. According to analysts, while a U.S. ban on Venezuelan oil imports could also hurt U.S. refiners, further restrictions on U.S. oil product exports to Venezuela could push the country's oil production off the cliff since the Latin American country relies on them for refining purposes.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More