The Trump administration sanctions stopped short of banning US companies from buying Venezuelan oil, but because the proceeds of such sales will be put in a “blocked account,” PDVSA is likely to quickly stop shipping much crude to the United States, its top client.
“If the people in Venezuela want to continue to sell us oil, as long as the money goes into blocked accounts we will continue to take it, otherwise will we not be buying it,” Treasury Secretary Steven Mnuchin said at a White House briefing.
Oil at sea, already paid for, would continue its journey to the United States, he said. White House national security adviser John Bolton said at the briefing the measure would cost Mr Maduro $11 billion in lost export proceeds over the next year and block him from accessing PDVSA assets worth $7 billion.
While there are significant exceptions, such as rules that should allow Citgo to keep using Venezuelan crude in US refineries, the sanctions will likely cause some reordering of global oil flows as Venezuela seeks to sell elsewhere.
Gulf refineries that use Venezuela’s heavy crude will have to look for alternatives to replace supplies. Despite a sharp decline in oil exports due largely to mismanagement of the industry and the economic crisis Venezuela remains the fourth-biggest vendor of oil to the United States, supplying some 500,000 barrels per day.