March 29, 2019

SANCTIONS: U.S. orders foreign firms to further cut down on oil trades with Venezuela.

The U.S. imposed fresh sanctions on Venezuela’s oil industry earlier this year but some companies have continued to supply the country with fuel from India, Russia and Europe.

Washington is particularly keen to end deliveries of gasoline and refined products used to dilute Venezuela’s heavy crude oil to make it suitable for export. Jet fuel and diesel would be exempt for humanitarian reasons, the sources said.

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced a ban in early February on the use of its financial system in oil deals with Venezuela after April.

But as recently as this week, the U.S. State department has called up foreign firms to say that the scope of the sanctions is wider.

The sources said that the State Department made clear that any kind of oil trade, whether it be direct, indirect or barter, would be considered a breach.

It wouldn’t be a bad thing to help hurry along the demise of Chavismo, but longterm I still wonder if sanctions will prove to have been a mistake.

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