World Economy

Trump Considering Financial Sanctions on Venezuela

Any US firm doing business with PDVSA  will face punishment.Any US firm doing business with PDVSA  will face punishment.

The United States under Donald Trump is considering financial sanctions on Venezuela that would halt dollar payments for the country’s oil, according to a senior White House official and an adviser with direct knowledge of the discussions. The move could severely restrict the OPEC nation’s crude exports and starve its socialist government of hard currency.

Sanctions prohibiting any transaction in US currency by Venezuela’s state-run oil firm, PDVSA, are among the toughest of various oil-related measures under discussion at the White House, the two sources told Reuters.

The administration aims to pressure socialist President Nicolas Maduro into aborting plans for a controversial new congress that critics say would cement him as a dictator.

Venezuela’s oil-based economy is in the grip of a brutal recession and a local currency crash, and Maduro has faced months of anti-government unrest that has claimed the lives of about 100 people. Sanctions on dollar transactions would make it even harder for Maduro’s government to secure cash for debt payments and finance imports of basic goods.

The White House declined to comment on the sanctions under consideration. PDVSA and Venezuela’s Oil Ministry did not immediately respond to requests for comment.

Measures on financial transactions would give President Donald Trump’s administration the power to escalate pressure on Venezuela by threatening punishment of any US firm doing business with PDVSA or US banks processing any of its transactions in dollars.

The financial restrictions have been “raised repeatedly” in recent discussions about options for actions against Maduro’s government, said the senior White House official, who spoke on condition of anonymity.

The administration is also discussing a ban on US oil imports from Venezuela, but no final decisions have been reached, the official said.

Sanctions on dollar transactions could be more punitive than an import ban because they would make it much more difficult for any refiner or trader to buy Venezuelan oil—not just customers in the United States.

The impact of sanctions on PDVSA would ripple across oil markets, forcing refiners to buy alternative supplies. The US could use crude from its Strategic Petroleum Reserve to blunt the impact of any short-term supply shortage, the policy adviser told Reuters.

The White House said earlier this week that Trump’s administration could take what it called “strong and swift economic actions” against Venezuela as soon as July 30.

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