US considers sanctions against Venezuela’s oil sector

WASHINGTON: The US is considering possible sanctions on Venezuela’s vital energy sector, including state oil company PDVSA, senior White House officials said, in what would be a major escalation of US efforts to pressure the country’s embattled government amid a crackdown on the opposition.

The idea of striking at the core of Venezuela’s economy, which relies on oil for some 95 percent of export revenues, has been discussed at high levels of the administration as part of a wide-ranging review of US options, but officials said it remains under debate and action is not imminent.

The officials, speaking on condition of anonymity, told Reuters the US could hit PDVSA as part of a “sectoral” sanctions package that would take aim at Venezuela’s entire energy industry for the first time.

But they made clear that the administration is moving cautiously, mindful that if such an unprecedented step is taken it could deepen the country’s economic and social crisis, in which millions suffer food shortages and soaring inflation. Two months of antigovernment unrest has left more than 60 people dead.

Another complicating factor would be the potential impact on oil shipments to the US, for which Venezuela is the third-largest oil supplier after Canada and Saudi Arabia. It accounted for 8 percent of US oil imports in March, according to US government figures.

“It’s being considered,” one of the officials told Reuters, saying aides to President Donald Trump have been tasked to have a recommendation on oil sector sanctions ready if needed.

“I do not think we are at a point to make a decision on it. But all options are on the table. We want to see the bad actors held to account.”

The US deliberations on new sanctions come against the backdrop of the worst protests faced yet by President Nicolas Maduro, who critics accuse of human rights abuses in a clampdown on the opposition.

The officials declined to specify the mechanisms under consideration and said the timing of any decision would depend heavily on developments on the ground in Venezuela.

Possibilities could include a blanket ban on Venezuelan oil imports and preventing PDVSA from trading and doing business in the US, which would have a severe impact on PDVSA’s US refining subsidiary Citgo.

A more modest approach, however, could be to bar PDVSA only from bidding on US government contracts, as the Obama administration did in 2011 to punish the company for doing business with Iran. Those limited sanctions were rolled back after the 2015 international nuclear deal with Tehran.

The Venezuelan government and PDVSA did not respond to requests for comment.