Washington has further tightened the screws on Venezuela’s oil industry.
Published on Venezuelanalysis, Apr 8, 2019
The US Treasury Department imposed a new round of sanctions targeting Venezuela’s oil industry on Friday.
The measures identified 34 vessels owned by Venezuelan state oil company PDVSA as “blocked property” in a bid to further tighten the screws on Venezuela’s oil sector.
“Treasury is taking action against vessels and entities transporting oil, providing a lifeline to keep the illegitimate Maduro regime afloat,” said Treasury Secretary Steve Mnuchin in a statement.
In addition, two companies and a vessel responsible for delivering Venezuelan crude to Cuba were sanctioned. Havana receives around 50,000 barrels per day (bpd) of Venezuelan oil as part of wide ranging bilateral treaties which include the presence of over 20,000 healthcare workers in Venezuela.
Washington has imposed several rounds of sanctions since the self-proclamation of Juan Guaido as “interim president” on January 23. Some measures have targeted governors and high-ranking military officials, while others have hit Venezuela’s banking, mining and oil sectors.
The sanctions against the oil sector include a de facto embargo on January 28, blocking all US companies from dealing with PDVSA while also freezing the assets of PDVSA’s US subsidiary, Citgo. The embargo effectively brought shipments of Venezuelan crude to the US from around 500,000 bpd to zero following a winding down period, and resulted in a further decline of Venezuela’s oil output as Caracas scrambles to find new buyers.
The latest sanctions came on the eve of rival demonstrations held in Caracas and other Venezuelan cities. Chavismo took to the streets of Caracas for the fifth straight Saturday, with an anti-imperialist march that had three starting points before converging on Miraflores Presidential Palace.
President Nicolas Maduro addressed supporters, stressing that the government is working to restore the electric grid, shielding the computerized system from viruses and attacks, protecting transmission lines and restoring equipment that was damaged by the outages.
“To every new sanction we shall respond with more revolution,” Maduro told the crowd in reference to the latest US sanctions.
For its part, the Venezuelan opposition mobilized in Caracas in its traditional middle and upper class strongholds on the eastern side of town. Guaido had called Saturday’s mobilizations a “dry run” of “Operation Freedom,” touted by the opposition as the final step in ousting the Maduro government. While further details of “Operation Freedom” have yet to be disclosed, Saturday’s demonstrations focused on recent water and electricity issues.
Guaido told the crowd that the country is “ever closer” to putting an end to Maduro’s “usurpation,” while also announcing a meeting of world leaders in Venezuela to address what he called a “humanitarian emergency.” The opposition leader previously saw his parliamentary immunity revoked last week in what could pave the way for criminal charges to be brought against him.
There were reports of clashes during Saturday’s opposition protests in Venezuela’s second largest city of Maracaibo, in Zulia State, with the National Guard using tear gas and rubber bullets to disperse opposition marchers. There are unconfirmed reports of 18 wounded and dozens arrested. Opposition lawmakers Nora Bracho and Renzo Prieto were among those temporarily detained.
Western states such as Zulia have been the hardest hit by the ongoing electricity crisis, with the recent outages compounding what was already intermittent service. The Venezuelan government recently announced an electricity rationing plan for the month of April, with locations in 20 out of 23 states having scheduled 3-hour outages 5 to 6 days a week.
While electricity and other services have been gradually stabilized, especially in Caracas and nearby areas, the electrical supply is still far from being fully restored countrywide, with reports that locations in the west or in the Venezuelan llanos are only getting a few hours of electricity at a time.
Venezuela has suffered from a number of major power outages in March, following what authorities have denounced as repeated cyber, physical and electromagnetic attacks against the electric grid and the country’s main electricity generator, the Guri Dam in Bolivar State.
Venezuela’s electric grid has been plagued by under-investment, lack of maintenance and emigration of qualified personnel, as well as the compounding effects of previous and recent US sanctions. Sanctions have stopped Caracas from servicing equipment, shut down access to credit lines, and caused shortages of fuel needed to activate backup thermoelectric plants.
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