The White House approved new sanctions against President Nicolas Maduro's regime on Friday, making it harder for Venezuela's embattled government to secure funds as Caracas spirals towards a default.
U.S. President Donald Trump signed the executive order, which prevents American financial institutions from offering new funds to Venezuela or to its state oil company, PDVSA. The oil firm's U.S. subsidiary, Citgo, will also be barred from repatriating profits - further isolating Caracas from international financial markets.
"These measures are carefully calibrated to deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule, protect the United States financial system from complicity in Venezuela's corruption and in the impoverishment of the Venezuelan people, and allow for humanitarian assistance," Washington said in a statement.
A senior official from the White House told the AP that Maduro's regime could be relieved of the sanctions if it halts its plans to rewrite the Venezuelan constitution, releases dozens of political prisoners, and negotiates fairly with its political opposition.
"The economic measures the U.S. government is preparing will worsen Venezuela's economic situation," Maduro told foreign journalists earlier this week, adding that he would enact measures to shield ordinary Venezuelans from the worst effect of the sanctions. Maduro's regime issued no immediate statement regarding the new restrictions.
Venezuela is currently undergoing a humanitarian crisis with medications and daily supplies in scarcity. In its heyday, Caracas used oil revenues to import almost all staple and luxury goods for its citizens, but a severe shortage in funds due to three years of low oil prices has caused the shipments to stop. Instead, Venezuela opens its border with neighboring Colombia from time to time to allow citizens to purchase life-saving medical goods and other needed items.
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
Comments
As if the wonderful aspects of Socialism had nothing to do with it.
The fact is that the world's biggest proven oil reserve was in deep dooodooo long before the prices crashed, and their production has been declining for decades . . . .
No, make no mistake in blaming the oil price - it is yet another example of the greatness of Marxist theories.