The United States has imposed sanctions on Venezuela’s state-run oil firm PDVSA as part of further pressure on the government of Venezuelan president Nicolás Maduro.
Venezuela, the world’s fifth largest oil exporter and OPEC member, depends largely on its oil export revenue.
As a result of the decision, all property and interests in property of PDVSA subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
According to a statement the Department of the Treasury’s Office of Foreign Assets Control (OFAC), the designation is aimed at preventing further diverting of Venezuela’s assets by Maduro and curbing the use of the oil firm in corruption practices.
The U.S. sanctions need not be permanent, OFAC said, and the U.S. will consider lifting sanctions for those who take concrete, meaningful, and verifiable actions to combat corruption in Venezuela, including PDVSA.
“The United States is holding accountable those responsible for Venezuela’s tragic decline, and will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly, and the Venezuelan people’s efforts to restore their democracy,” said Secretary of the Treasury Steven T. Mnuchin.
“The path to sanctions relief for PDVSA is through the expeditious transfer of control to the Interim President or a subsequent, democratically elected government.”
According to Bloomberg, even though the sanctions relate to dealings with U.S. persons, the move is likely to have a much wider impact on global scale as many banks will cease dealing with the company.
The impact of the sanctions on the tanker market is yet to be seen. However, the measure comes at a time when tankers are finally seeing a recovery of freight rates as demand-supply balance continued to be tight.