US wants India to stop buying Venezuelan oil
WASHINGTON: The US is pressing India to stop buying Venezuelan oil that is a major source of revenue for Venezuelan President Nicolas Maduro’s government, Washington’s top envoy for Venezuela said, as the Trump administration this week threatened more US sanctions to cut off Maduro’s financial lifelines.
“We say you should not be helping this regime, you should be on the side of the Venezuelan people,” Elliott Abrams told Reuters in an interview.
The Trump administration has given the same message to other governments, Abrams said, and has made a similar argument to foreign banks and private companies doing business with the Maduro government.
Abrams described the US approach as “arguing, cajoling, urging.”
The pressure on India comes as the US and its regional allies, who back Venezuelan opposition leader Juan Guaido, threaten more sanctions to cut off revenue streams to Maduro’s government and force him to step down.
Washington views Guaido as Venezuela’s legitimate leader and has imposed sanctions on the country’s oil sector and announced asset freezes and travel bans targeting top government officials.
The Indian market is crucial for Venezuela’s economy because it has historically been the second-largest cash-paying customer for the Opec (Organization of the Petroleum Exporting Countries) country’s crude, behind the US, which through sanctions against Maduro has handed control of much of that revenue to Guaido.
Oil shipments to China, Venezuela’s other major importer, do not generate cash because they go to pay off billions of dollars in loans made to Caracas by Beijing.
The talks over Venezuela come as trade tensions rise between Washington and New Delhi, and when the US is also pushing India to cease buying Iranian oil.
The US is planning to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of its exports to the US. US sanctions typically block American firms from doing business with specific foreign governments or companies.
Seeking to prevent Indian purchases of Venezuelan crude would be part of a strategy known as “secondary sanctions,” in which Washington applies penalties to companies not based in the US.
That strategy, and even the threat of using it, was vital in Washington’s pressure campaign to cut off revenue to Iran, which eventually helped force Tehran to negotiate a nuclear deal with six world powers in 2015.