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U.S. Steps Up Sanctions On Venezuela As Oil Exports Hit 17-Year Low

The United States ratcheted up its sanctions on Venezuela’s oil industry on Tuesday, focusing this time on maritime companies and their assets who have been assisting the Latin American country in getting its blacklisted crude oil to market, the U.S. Department of the Treasury said on Tuesday.

“The illegitimate Maduro regime has enlisted the help of maritime companies and their vessels to continue the exploitation of Venezuela’s natural resources for the regime’s profit,” Treasury Secretary Steven Mnuchin said, adding that the US will continue to target anyone to supports Maduro’s regime and contributes “to the suffering of the Venezuelan people.”

The additional sanctions comes on the same day as PDVSA documents showed that Venezuela’s oil exports plummeted to a 17-year low, according to Reuters. Venezuela exported just a hair over 450,000 bpd of crude oil in May—just 18 cargoes.

The 17-year low is attributed in part to the U.S. sanctions which has turned out to be akin to a game of whack-a-mole, with new shippers willing to ship PDVSA almost as soon as the last batch were sanctioned.  

The previous round of sanctions hit Rosneft subsidiaries. A Mexico company, Libre Abordo, was another company willing to trade oil with Venezuela, but the company declared bankruptcy on Sunday, claiming that the United States had spearheaded an international political campaign against it, causing it to lose more than $90 million.

Libre Abordo said that Maduro had canceled the oil for food swap arrangement.

The United States is having a hard time squashing Venezuela’s oil exports to zero with Iran sending five tankers of fuel to the struggling country, with Iran unconcerned about running afoul of sanctions against Venezuela since its own crude oil is sanctioned as well.

By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on June 03 2020 said:
    Despite extremely harsh US sanctions. Venezuela is managing to sell its oil around the world with the help of friendly nations. Furthermore, Venezuela has every right under the sun to sell its oil by any means possible.

    What is illegitimate is not the Maduro regime which was voted in by a majority of the Venezuelan people but the intrusive US sanctions. The US Treasury Secretary Steven Mnuchin is distorting the facts on the ground when he claims that the Maduro regime has enlisted the help of maritime companies and their vessels to continue the exploitation of Venezuela’s natural resources for the regime’s profit. It is US sanctions that are contributing to the suffering of the Venezuelan people.

    When Iran sends loads of petroleum products to help a friendly country facing a crisis, it is doing so because it understands the suffering of the Venezuelan people having itself been suffering from the same oppressive US sanctions.

    Russia’s oil giant Rosneft has until very recently been helping Venezuela market at least 70% of its crude around the world particularly to India. When Rosneft finally announced its departure from Venezuela a few weeks ago, American officials were quick to claim a win for the sanctions campaign. But their victory was premature.

    While sanctions decoupled Rosneft from Venezuela, the departure of the oil company didn’t signal Russian abandonment of Venezuelan President Maduro. Instead, the divestment of Rosneft was to sell off its Venezuelan assets to none other than an entity owned by the Russian government.

    The result of this financial chicanery is that the oil company has manoeuvred itself outside of the reach of sanctions.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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