Venezuela Oil Sanctions Pose a Challenge for Chevron and Valero, Analysts Say

Posted January 30, 2019

The Trump administration sanctioned Petroleos de Venezuela SA and the country's central bank on Monday, the latest move to raise pressure on President Nicolas Maduro after the US recognized opposition leader Juan Guaido as interim president.

In response, USA national security adviser John Bolton warned of "serious consequences for those who attempt to subvert democracy and harm Guaido", in a tweet that described Saab as the "illegitimate former Venezuelan Attorney General".

The sanctions were announced to ratchet up pressure against Maduro and demonstrate usa support for Juan Guaido, the Venezuelan opposition leader who proclaimed himself interim president last week and was immediately recognised by the United States and a host of other countries.

The US and more than 20 countries have recognised opposition leader Juan Guaidó as interim president.

The moves were aimed at intensifying pressure on President Nicolas Maduro, who was re-elected previous year in a contest widely seen as fraudulent.

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The assets include official accounts at U.S. insured banks as well as funds held by Caracas at the United States federal reserve. The economic sanctions were aimed at increasing pressure on Maduro to cede power to the opposition.

The head of state claim by the 35-year-old leader of the opposition-led national assembly has garnered the backing from most Western powers led by the United States.

The military is planning larger exercises on February 10-15, which Maduro said would be the "most important in the history of Venezuela".

The U.S. State Department says American's shouldn't travel to Venezuela and it warns of unrest and the threat of being arbitrarily arrested.

PDVSA responded to the sanctions by ordering customers with tankers waiting to load crude destined for the United States to prepay, according to sources. "We are waiting for you and the commitment you have to our constitution", Guaido said at a Sunday news conference.

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Kremlin spokesman Dmitry Peskov also said that the US sanctions against PDVSA amounted to illegal interference in Venezuela's internal affairs, and that Russian Federation would use all the legal mechanisms at its disposal to protect its interests there.

Valero and Citgo are among the largest importers of Venezuelan crude.

Russian Deputy Finance Minister said on Tuesday said he expects Venezuela will have problems servicing its $3.15 billion in sovereign debt to Moscow.

But Venezuela is very reliant on the US for its oil revenue.

The trips have apparently paid off, as support for Guaido quickly poured in from right-wing governments in Latin America, in what the Financial Times called an "apparently co-ordinated move".

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China believes that Venezuela's affairs must and can only be decided by the its own people, a Chinese Foreign Ministry spokesperson said Friday.