Ways the US can hit Venezuela oil with sanctions

2 Aug 2017   Venezuela

Venezuela’s oil sector is at risk of US sanctions following President Nicolás Maduro’s decision to push ahead with an election for an all-powerful political assembly, which critics fear will snub out the last vestiges of democracy in the Opec member. Steven Mnuchin, US Treasury secretary, said this week the government would “continue to review all of our options” when asked whether oil sanctions were coming. Here are the two most likely paths the US could pursue should it follow through on its threat to take “strong and swift” economic action against Venezuela. 1. Blocking imports of Venezuelan crude Seen as one of the most aggressive potential sanctions, blocking imports of Venezuelan crude to the US is likely to have the biggest immediate effect on the wider market. Refineries in the US are the largest buyers of Venezuela’s heavy crude supplies, and if those are shut off, they will need to quickly find alternatives. While imports are led by Citgo, the refiner owned by Venezuela’s state-backed oil company PDVSA, other refineries in the US are also big buyers, with seven companies taking more than 1m barrels of crude from the country in April. In May, independent refiner Valero bought even more Venezuelan crude than Citgo, according to the US Energy Information Administration, importing almost 200,000 barrels a day.

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