In an attempt to force President Nicolas Maduro out of power, the United States government through the Trump administration has now imposed sanctions on the country's state-owned oil company. The sanction, announced just this week, is the administration's first steps to cripple the government still run by Maduro.
Juan Guaido, leader of the National Assembly, has already declared himself as the interim president of the country. However, Maduro still holds a lot of control over the Venezuelan government. The sanctions placed on Petroleos de Venezuela, or PDVSA, prohibits any transactions with businesses located in the United States. With transactions and businesses now grinding to a halt, the company is expected to lose at least US$11 billion in revenue over the course of this year.
The sanctions will also block US$7 billion in assets from being retrieved, all of which are meant to cut the government's source of foreign currency and revenue. The United States currently supports Guaido and the National Assembly. Venezuela citizens are currently calling on new elections to legally oust Maduro as its leader. Maduro has already cut ties with the United States and all diplomats have already been sent home.
Treasury secretary Steven Mnuchin recently mentioned in a statement to the press that the administration only wants to restore Venezuela's democracy. One way of doing it is to stop the PDVSA from being Maduro's embezzlement vehicle. Guaido and the National Assembly recently revealed that over US$3 billion in revenue generated by the PDVSA have gone missing in the past few years.
The Trump administration is apparently also ready to take all economic and diplomatic action to support Guaido and his National Assembly. Maduro has issued a statement in response to the recent sanctions, calling it illegal and criminal. The embattled president, who is accused of corruption and the mismanagement of public funds, also told Trump that there will be blood on his hands if he does not lift the sanctions. Maduro has instructed the oil company to initiate legal action to take back its assets.
The sanction will also mean that the United States will not be able to import the yearly half-a-million barrels of oil is usually gets from Venezuela. A lot of business is also expected to be lost as some American companies do export materials to the PDVSA on a regular basis. The Trump Administration has made it clear that it will only remove the sanctions once Guaido takes full control of the Venezuelan government.
