The move ratchets up pressure on the current Venezuela administration. The US and other countries recognised Guaido last week as Venezuela’s rightful president, and he said Monday that he would take control of Venezuelan accounts abroad and appoint new boards to PDVSA and its Houston-based subsidiary Citgo Petroleum.
President Donald Trump assailed Maduro in a letter to Congress explaining an executive order he issued sanctioning PDVSA and Venezuela’s central bank. He stated that the action would bolster Guaido, accusing current president Maduro’s regime of “human rights violations and abuses in response to anti-Maduro protests, arbitrary arrest and detention of anti‑Maduro protesters, curtailment of press freedom, harassment of political opponents, and continued attempts to undermine Guaido’s government-in-waiting.”
“The U.S. is holding accountable those responsible for Venezuela’s tragic decline,” Treasury Secretary Steven Mnuchin stated.
US officials had long been hesitant to apply sanctions on Venezuelan oil because they did not want to exacerbate the humanitarian crisis in the country. However, with Maduro and Guaido, a 35-year-old engineer-turned-lawmaker locked in a struggle for support in the streets and the military, they decided that it’s now worth the risk. Guaido so far hasn’t been able to sway the armed forces to his side, but he’s tapped deep public resentment with an economy beset by hyperinflation and vast shortages of food and medicine.
In an interview with CNN en Espanol, Guaido stated that he had spoken to Trump, but did not provide any details.
National Security Adviser John Bolton told reporters at the White House that Trump’s action would block $7bn in Venezuelan assets and reduce the country’s exports by $11bn over the next year, though Maduro is sure to attempt to sell PDVSA’s crude elsewhere.
He also urged Venezuela’s military to accept a peaceful transfer of power to Guaido.
Mnuchin stated that Citgo would be able to continue to operate but won’t be allowed to remit money to the Maduro regime. Its proceeds must instead be held in blocked US accounts. The Treasury secretary added that in the “short term” he expects “modest” impact on US refineries. He noted the sanctions wouldn’t affect oil already purchased that is being shipped, and said he didn’t expect US gas prices to rise.
Maduro decried the asset freeze as a “robbery” on state television Monday evening and instructed PDVSA’s President Manuel Quevedo to take legal actions in US and international courts against the sanctions.
West Texas Intermediate crude futures in New York were little changed at $51.98 a barrel as of 9:01 a.m. in Singapore on Tuesday, after settling $1.70 lower on Monday.