U.S. goes after Venezuela's oil to hit embattled Nicolas Maduro

The Trump administration imposed sanctions Monday on the state-owned oil company of Venezuela, a potentially critical economic move aimed at increasing pressure on President Nicolas Maduro to cede power to the opposition.

White House national security adviser John Bolton said on Monday the new measures would cost Maduro $11 billion in lost export proceeds over the next year and block him from accessing PDVSA assets worth $7 billion.

Some 75 per cent of the country's cash-generating oil shipments go the United States, according to Barclays, but Mr Maduro retains the support of Russia, China, Turkey and Iran and is likely to divert shipments to them.

Mnuchin also said in the Treasury's statement that the United States will "continue to use the full suite of its diplomatic and economic tools to support" Guaido, head of the National Assembly, who declared himself interim president during an anti-government rally.

PDSVA is the acronym for the state-owned oil company.

Inside Venezuela, Maduro holds the reins of power with the armed forces still loyal despite an opposition push to lure their support by proposing amnesty for anybody who supports Guaido's transitional government.

The assets include official accounts at United States insured banks as well as funds held by Caracas at the U.S. federal reserve. "They should bear responsibility for the serious consequences from this", he said.

In a defiant national broadcast on Monday night, Maduro said he would take legal action to defend Citgo Petroleum Corp, PDVSA's US refining subsidiary, which he said the United States was trying to steal.

The Kremlin condemned the sanctions as illegal interference, while China said they would lead to suffering for which Washington would bear responsibility. Representatives of the council gave no explanation for the note and didn't respond to questions about whether President Donald Trump would deploy the military to Venezuela's neighbour.

Russian Federation also backed Maduro latest response.

The Florida Republican represents a large Venezuela expatriate community and is a vocal opponent of the Maduro regime, which the US declared illegitimate last week. Both countries have lent billions of dollars to Venezuela and are concerned about new stress on debt payments.

It does, however, prevent United States firms from exporting certain oil products Venezuela needs to blend with its own crude for sale elsewhere.

But in order to protect Citgo from sanction headwinds, Mnuchin said the US has been "very careful" in balancing this.

However, Mnuchin said PDVSA's US-based subsidiary Citgo would be able to continue operations, as long as its earnings were deposited into a blocked account in the United States.

  • Eleanor Harrison