US to impose stronger sanctions on Maduro regime's financial networks -US vice president
By Brian Scheid / Platts
Petroleumworld 02 25 2019
The US is set to impose "even stronger sanctions" on Venezuela President Nicolas Maduro's financial networks, likely further hindering crude oil production and exports as US sanctions on state-owned oil company PDVSA entered their fifth week, US Vice President Mike Pence said Monday.
"We will find every last dollar they have stolen and return that money to the Venezuelan people," Pence said in a speech in Colombia before the Lima Group. "As we continue to bring economic and diplomatic pressure to bear on the Maduro regime, we hope for a peaceful transition to democracy, but as President Trump has made clear, all options are on the table."
Pence also urged members of the Lima Group to freeze assets of PDVSA. The US, along with 13 of the 14 nations in the Lima Group, does not recognize Maduro as Venezuela's legitimate president. Mexico is the lone Lima Group member to not recognize opposition leader Juan Guaido as Venezuela's legitimate president.
The US on Monday also announced new sanctions on four Maduro-aligned Venezuelan state governors, including Ramon Carrizales, Venezuela's vice president from January 2008 to January 2010.
"US sanctions need not be permanent; they are intended to change behavior," the US State Department said in a statement Monday. "The United States will continue to take appropriate action to respond to the situation in Venezuela as it develops."
The sanctions follow violence at Venezuela's border over the weekend over aid deliveries into the country.
On January 28, the US Treasury Department unveiled sweeping sanctions on PDVSA, setting an immediate ban on US exports of diluent to Venezuela and requiring payments made to PDVSA to be through blocked accounts, setting up a de facto ban on US imports of Venezuela crude. On February 1, Treasury announced that transactions between non-US firms and PDVSA which involve the US financial system or US commodity brokers would be prohibited after April 28.
In a note Sunday, analysts with ClearView Energy Partners wrote that Treasury may decide to impose that prohibition before April 28 as a way to increase pressure on Maduro.
"We also would not rule out 'secondary sanctions' intended to block third parties from transactions with PDVSA in any currency," ClearView analysts wrote. "Either option seems likely to substantially tighten already declining Venezuelan exports."
PDVSA crude oil production, which averaged an estimated 1.16 million b/d in January, is expected to fall below 800,000 b/d in February due to the loss of US diluent imports.
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Story by Brian Scheid from Platts / SPGlobal.
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