Trump administration announces sanctions targeting Venezuela’s oil industry

Updated: January 28, 2019 Published: January 28, 2019

The headquarters of the state-owned oil company Petroleos de Venezuela, PDVSA, stands in Caracas, Venezuela, Monday, Jan. 28, 2019. The Trump administration imposed sanctions Monday on PDVSA, a potentially critical economic move aimed at increasing pressure on Venezuelan President Nicolas Maduro to cede power to the opposition. (AP Photo/Fernando Llano)

WASHINGTON - The Trump administration on Monday ordered U.S. companies doing business with Venezuela to divert payments to special blocked accounts, in a quest to keep one of the country’s few sources of revenue from flowing to the government of Nicolas Maduro.

The order will affect Citgo, the Venezuelan-owned, Houston-based oil company, and Valero, the American oil refiner that is the largest in the United States. Both import substantial amounts of low-quality crude oil from Venezuela and will be able to continue to do so as long as the payments do not go to the Maduro regime.

John Bolton, head of the National Security Council, said the Venezuelan government "can no longer loot the assets of the Venezuelan people."

The new economic sanctions are designed to weaken Maduro and strengthen the hand of Juan Guaido, whom the United States recognized last week as interim president of Venezuela.

"As we've said in the past, the purpose of sanctions is to change behavior," Treasury Secretary Steven Mnuchin said, adding that when there are "rightful leaders" in Venezuela, "then indeed that money will be available to Guaido."

At the same time, depending on how Maduro responds, the new sanctions could have little effect on U.S. refinery operations, which employ hundreds of Americans and produce gasoline and other refined petroleum products.

Oil companies last week had been uncertain how to pay for new imports of Venezuelan crude oil.