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Venezuelan crisis

US weighing sanctions on Venezuela’s oil sector

PUBLISHED : Monday, 05 February, 2018, 4:44am
UPDATED : Monday, 05 February, 2018, 4:44am

The Trump administration is weighing restrictions on Venezuela’s oil exports and the sale of US-refined petroleum products to the country, but it is wary of the damage that may cause to American companies, Secretary of State Rex Tillerson said.

Tillerson said the US raised the possibility of oil sanctions as a way of punishing the regime of Venezuelan President Nicolas Maduro with Argentina officials on Sunday and when the secretary of state was in Mexico City.

Tillerson spoke on Sunday at a press conference in Buenos Aires alongside Foreign Minister Jorge Faurie.

“One of the aspects of considering sanctioning oil is what effect would it have on the Venezuelan people, and is it a step that might bring this to an end,” Tillerson said of conditions in the South American country under Maduro. “Because not doing anything to bring this to an end is also asking the Venezuelan people to suffer for a much longer time.”

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The fact that Tillerson has raised the possibility of oil restrictions in both stops of his trip so far to Latin America suggested the administration is seriously weighing such an embargo, a step it has so far avoided even as it targets Venezuela’s financial sector and sanctions top officials.

Further isolating Venezuela is a central focus of Tillerson’s week-long trip to the region, which will see him stop in Peru, Colombia and Jamaica after visiting Mexico and Argentina.

The US has imposed sanctions on more than a dozen top Venezuelan officials – including Maduro himself – as part of efforts to punish Venezuela after numerous accusations of electoral abuses and human-rights violations.

Still, sanctioning the oil sector could potentially damage US companies and cost US jobs. Venezuela is a major source of crude imports for the US market, though the amount has been declining in recent months. The country is also a key market for American oil refiners.

Tillerson said discussions about sanctions are looking at “how to mitigate the impact on US business interests.” He said the US also recognised that other countries in the region could be harmed by such a move.

In considering oil sanctions, the US must also weigh concerns from Caribbean countries, which rely on cheap Venezuelan oil. Tillerson is expected to raise the issue when he visits Jamaica’s capital Kingston on February 7.

In November, Argentina President Mauricio Macri said in an interview with The Financial Times that the US should impose an oil embargo on Venezuela. Faurie was more cautious in his remarks on Sunday, saying he and Tillerson had discussed the necessity that sanctions “should not affect the situation of the Venezuelan people, the purpose being to control the financing for the current government.”