US Considers Sanctions on Companies Facilitating Venezuelan Oil Shipments to Cuba

March 17, 2019by Nora Gamez Torres

The Trump administration is considering imposing sanctions on companies from third countries that facilitate the shipment of Venezuelan oil to Cuba, a senior administration official said.

“The interim president of Venezuela, Juan Guaido, recognized by the U.S. and Europe, where most of these companies are from, has asked us to stop these shipments and we are considering everything to be supportive,” the official said.

The Venezuelan National Assembly, controlled by the opposition, agreed to suspend the shipment of crude oil to Cuba as part of a state of emergency decree approved Monday to respond to the chaos caused by a major electrical blackout. Guaido published on Twitter a chart estimating that the Nicolas Maduro regime sends 47,000 barrels of oil a day to Cuba, worth about $2.5 million under current world oil prices.

The decision “to cut the oil supply to Cuba asserts our independence,” Guaido wrote on Twitter. And the income from oil should boost the reconstruction of Venezuela.”

The U.S. official said the administration is “aware of these shipments, we know where they are and who the companies are.” The official said both the U.S. and the interim Venezuelan government could take legal action against the companies. The U.S. has imposed similar sanctions on companies facilitating trade with North Korea and Iran. There are other steps the U.S. can take to increase pressure on the Maduro government, the official said, including the interdiction of oil shipments, “but we´re on step 1.”

Through an agreement between the Fidel Castro and Hugo Chavez to exchange oil for medical services, Venezuela sends 40,000 to 50,000 barrels of oil a day to Cuba, less than half what it supplied a few years ago before oil production plunged under Maduro.

In the midst of the deepest drop in oil production in 33 years, Venezuelan oil company PDVSA also bought $440 million in Russian oil to ship to Cuba from January 2017 to May 2018, according to documents obtained by Reuters. The company paid $12 more per barrel than the subsidized price for shipments under the barter agreement with Cuba.

These shipments could stop or be substantially reduced if the National Assembly, with the aid of the U.S. government, succeeds in stopping the shipments or at least disrupts their transportation.

The National Assembly appears to have taken control of Citgo, the PDVSA subsidiary in the United States, and appointed a new board to run PDVSA, but it is not clear yet how much control it has over the national oil firm.

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©2019 Miami Herald

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Distributed by Tribune Content Agency, LLC.

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