Elliott Abrams, US Special Representative for Venezuela, on Monday said that Washington is preparing tighter oil sanctions on Venezuela. The tightened sanctions can potentially include prohibiting some oil firms from exchanging Venezuelan oil for fuel from the OPEC countries, which is currently exempted under the existing sanctions.
US President Donald Trump began imposing sanctions on Venezuela’s state-run PDVSA and its international partners in early 2019 after many Western countries deemed the reelection of the socialist Venezuelan President Nicolas Maduro in 2018 a sham. Trump’s administration has ever since ramped up the measures aimed to oust Maduro.
The sanctions have already prevented customers from purchasing crude oil produced by PDVSA. As a result, Venezuela’s crude exports plummeted to an eight-decade low of below 400,000 bpd. However, Maduro’s grip in power remained strong, and some officials said it had frustrated Trump. A report by Reuters said that Washington had given industries an October deadline to wind down all trade with Venezuela.
Some European and Asian refiners continue doing business with PDVSA through transactions that are allowed under the current sanctions. These transactions include swaps of crude for diesel and crude as debt repayment. Abrams, however, declined to disclose whether these practices will be included in the next sanctions. Diesel is essential for power generation and food distribution. Hence, activists warned of potential humanitarian impact from banning diesel swaps.
