Page 2 - aruba-today-20190129

A2 UP FRONT
Tuesday 29 January 2019
OIL SANCTIONS next year.
Continued from Front Oil production — the life-
In words directed at Presi- blood of Venezuela's econ-
dent Donald Trump, he omy — has been collaps-
said, "Hands off Venezu- ing for years. Despite sitting
ela!" atop the world's largest
The sanctions follow the reserves, Venezuela cur-
unusual decision by more rently pumps just a third of
than 20 countries, including the 3.5 million barrels a day
the U.S., to recognize the it did when the late Hugo
opposition leader of the Chavez took power in 1999.
National Assembly, Juan The nation's refining ca-
Guaido, as the interim pres- pacity has also declined
ident of Venezuela. Madu- because of poor mainte-
ro was re-elected last year nance and lack of skilled
in an election widely seen personnel. That has left it
as fraudulent. The once reliant on Citgo, the Hous-
prosperous nation has ton-based refining arm of
been in an economic col- PDVSA, to refine the oil and
lapse, with several million send gasoline back to Ven-
citizens fleeing to neighbor- ezuela to meet domestic
ing countries. needs.
"We have continued to "They have just lost that
expose the corruption of source," said Russ Dallen,
Maduro and his cronies, managing partner of Ca-
and today's action ensures racas Capital, a brokerage
they can no longer loot the company.
assets of the Venezuelan Venezuela is very reliant on
people," national security the U.S. for its oil revenue, Workers and customers gather at a wholesale food market in Caracas, Venezuela, Monday, Jan.
adviser John Bolton said at sending 41 percent of its 28, 2019.
a White House news con- oil exports to the U.S. Mad- Associated Press
ference to announce the uro can divert the roughly
sanctions with Treasury Sec- 500,000 barrels per day Transport costs would also He said if PDVSA wants to supported the Trump ad-
retary Steven Mnuchin. of oil currently being sold jump because Venezuela's see the sanctions lifted, ministration's goal to bring
Bolton said he expects to Gulf Coast refineries to ports aren't well-equipped there would have to be a change to Venezuela.
Monday's actions against markets in Russia, China, In- to load supertankers for speedy transfer of control "To that end, we will work
PDVSA — the acronym for dia, Malaysia and Thailand. transporting oil to distant to the interim, U.S.-backed with the administration to
the state-owned oil com- But processing internation- markets. president and a democrat- minimize any unnecessary
pany — will result in more al financial transactions is That means the country, ically elected government disruptions or negative im-
than $11 billion in lost ex- hard without going through which depends almost en- that is "committed to taking pacts to the market and
port proceeds during the the U.S. or European banks. tirely on oil exports for hard concrete and meaningful American consumers," the
currency, will be able to actions to combat corrup- association said.
purchase even less food tion." Mnuchin insisted the sanc-
and other imports, poten- He said the Treasury De- tions would have only a
tially worsening shortages partment has taken steps "modest" impact on U.S.
and deepening its eco- to allow refineries to contin- refineries because Ven-
nomic collapse. ue importing oil from Ven- ezuelan oil exports to the
Outside the PDVSA head- ezuela temporarily. Also, U.S. have declined steadily
quarters in Caracas, office he said Citgo will be able over the years, falling par-
workers lining up to board to continue importing oil as ticularly sharply over the
red company buses were long as the revenue is sent past decade as its produc-
seeking information about to the blocked account in tion plummeted amid its
the immediate impact of the United States. long economic and politi-
the U.S. sanctions. As he "This is a country that is cal crisis. The U.S. imported
hurried home with his two very rich in oil resources," less than 500,000 barrels a
children, one employee Mnuchin said. "There is no day of Venezuelan crude
told The Associated Press reason why these resources and petroleum products in
that the sanctions signaled shouldn't be used for the 2017, down from more than
tough times ahead. economic benefit of the 1.2 million barrels a day in
"Things are going to get dif- people there." 2008, according to the En-
ficult," said the man, who re- Mnuchin said he did not ex- ergy Information Adminis-
fused to identify himself by pect the sanctions would tration. Still, Venezuela has
name because he feared cause U.S. consumers to consistently been the third-
reprisals from the compa- see higher prices at gas or fourth-largest supplier
ny. "The United States is one pumps. of crude oil to the United
of the few buyers who pays The American Fuel & Petro- States, and any disruption
for the oil up front, and it's chemical Manufacturers, of imports could be costly
probably where most of our which represents 95 per- for refiners. In 2017, the
income comes from." cent of the refining sector, most recent year that data
Mnuchin said any money has lobbied hard during were available, Venezu-
that U.S. entities use to buy the past two years against ela accounted for about
Venezuelan oil will go into any sanctions that would 6 percent of U.S. crude im-
a blocked account in the disrupt imports of Venezu- ports. Valero and Citgo are
United States, not the Mad- elan oil. The association is- among the largest import-
uro government. sued a statement saying it ers of Venezuelan crude.q