USA imposes sanctions on Venezuela state oil firm PDVSA
- Author: Darren Santiago Jan 30, 2019,
Jan 30, 2019, 0:40
Analysts say a lack of export pipeline capacity means Canada will not be able to boost shipments to take advantage of USA sanctions against Venezuela's national oil company, PDVSA.
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. On the same day, the United States recognized Guaido as the interim leader of Venezuela.
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".
The U.S. State Department said on Tuesday it had certified Guaido's authority to control certain assets held by the Federal Reserve Bank of NY or other U.S. -insured banks, including government and central bank accounts.
But Senator Bob Menendez of New Jersey, the senior Democrat on the Foreign Relations Committee, said the Trump administration should brief Congress on its moves against Maduro.
Countries around the world have recognised Guaido as Venezuela's rightful leader, and the United States vowed to starve Maduro's administration of oil revenue after he was sworn in on Jan 10 for a second term that was widely dubbed illegitimate.
China has said it opposes unilateral sanctions.
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Russian Federation also backed Maduro latest response. Such prepayment could be in violation of the sanctions, setting the stage for a standoff at the ports.
Meantime, the US sanctions make a default on PDVSA's 2020 notes, the one bond Venezuela has continued to service while skipping more than $9 billion in payments, all but guaranteed, according to Francisco Rodriguez, the chief economist at Torino Capital in NY.
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.
Maduro on Monday pledged to retaliate against the U.S. measures, without giving specific details.
Foreign Ministry spokesman Geng Shuang said historical experience showed foreign interference "only makes situations more complicated".
PDVSA's US-based subsidiary Citgo will be able to continue operations, as long as its earnings are deposited into a blocked account in the United States.