Impact of sanctions on Venezuelan oil

Radio France International News from America

January 30, 2019

The US Treasury Secretary announced on Tuesday that he would ban the Nicolás Maduro government from accessing the petrodollars of its Citgo subsidiary in the United States, claiming that the Chavez regime is using these resources for corrupt purposes.

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According to Washington, $ 7,000 million from Venezuelan society will be immediately frozen and the management of these revenues will go to the alternative government of the opposition, Juan Guaidó, recognized by the White House as the legitimate president of Venezuela.

José Toro Hardy, a Venezuelan economist and former PDVSA executive, explains that with these sanctions, Washington cuts Nicolás Maduro's government as the main source of foreign currency: "For Venezuela, the consequences are quite serious, 96% of the foreign exchange income that Venezuela receives comes from the oil sector, the vast majority of which comes from our exports to the United States, which is about 500,000 barrels a day. The other who buys the most is our own American subsidiary, Citgo. "

Deprived of its main source of foreign exchange allowing it to buy drugs and subsidized food, the government of Nicolás Maduro could face a very serious internal crisis in about 15 days, predicts Isabelle Rousseau, oil expert in El Colegio de México: "The only currency that Venezuela currently receives the money from the sale of oil in the US Without this income, Maduro could not survive.How will he pay his officials? In 15 days, if Maduro continues to be asphyxiated in this way, there will be an internal crisis against him. "

For Venezuela, the market alternatives are few: the other major oil producing countries, China and Russia, already have deposits in Venezuela.

"The Chinese and Russians have acquired several oil and oil block deposits, especially since 2015, and they were bought at a very low price and were bought against the will of the National Assembly, which does not recognize Many of these deposits are used to pay interest on the Venezuelan debt, Venezuela owes about $ 20 billion to China and $ 8 billion to Russia.The National Assembly said that the day he came to power it will not recognize deposits, wells, blocks, or debt, so I think the Russians and the Chinese are seeking to recover their loans, "says Isabelle Rousseau.

Venezuelan President Nicolás Maduro denounced an unscrupulous robbery and announced legal action against the US decision. The company PDVSA for its part believes that the fact of not being able to provide its customers after blocking its accounts is a situation of force majeure.

Interviewed: José Toro Hardy, Venezuelan economist, former board member of PDVSA, and Isabelle Rousseau, oil expert, coordinator of the Energy Program of the International Studies Center of El Colegio de México.

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