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Sanctions on Venezuela’s Oil Company Just a Start

Posted By Ray Walser On May 31, 2011 @ 11:45 am In International | Comments Disabled

With considerable prodding from Congress—especially from the new Republican majority in the House—the Obama Administration and Department of State announced [1] on May 24 that it is placing Venezuela’s national oil company Petróleos de Venezuela (PDVSA) [2] on its list of companies sanctioned for their work in helping expand Iran’s petroleum and gasoline production.

The action followed PDVSA’s sale of $50 million in petroleum products in late 2010. Venezuelan President Hugo Chavez, moreover, has not backed down on his promise to supply Iran [3] with 20,000 barrels of gasoline per day.

The new sanctions prohibit PDVSA from competing for U.S. government procurement contracts, from securing financing from the Export-Import Bank of the U.S., and from obtaining U.S. export licenses. These sanctions do not apply to PDVSA subsidiaries and do not prohibit the export of crude oil to the United States. The sanctions will not at present interfere with the operations of Venezuelan-owned refineries [4] and CITIGO distribution or with import of Venezuelan crude [5] oil.

The measured has long been urged by Republicans in both houses of Congress, including by the chairman of the House’s Western Hemisphere subcommittee Connie Mack [6] (R–FL).

“It is imperative,” writes former Bush Administration official Jose Cardenas [7], “that U.S. investigators continue to strip away the layers of the Venezuelan-Iranian axis to examine what other forms of criminality are taking place, such as money laundering and Venezuelan-Hezbollah complicity in drug trafficking, in addition to Venezuelan-Iran military cooperation. (Germany’s Die Welt reported [8]this month that Iran is planning to build medium-range missile bases [9] in Venezuela, astride Panama Canal shipping lanes.)”

The Chavez regime predictably accused the U.S. of responding to the prohibited sales in “imperial fashion” and warned [10] that it will consider reducing exports to the U.S., an action that might easily do more damage to the Venezuela’s battered economy than to the U.S. Chavez nonetheless will attempt to use the U.S. measures to whip up anti-American sentiment [11] in advance of next year’s presidential elections.

The latest action is a long-overdue first step toward recognizing that the Chavez challenge [12] presents a long-term threat to U.S. security in Latin America.


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URL to article: http://blog.heritage.org/2011/05/31/sanctions-on-venezuela%e2%80%99s-oil-company-just-a-start/

URLs in this post:

[1] announced: http://www.state.gov/s/d/2011/164161.htm

[2] it is placing Venezuela’s national oil company Petróleos de Venezuela (PDVSA): http://www.state.gov/r/pa/prs/ps/2011/05/164132.htm

[3] promise to supply Iran: http://www.foxnews.com/world/2010/10/19/chavez-iran-talks-boosting-oil-gas-ties/

[4] Venezuelan-owned refineries: http://www.reuters.com/article/2011/05/24/usa-venezuela-oil-idUSN2425410020110524

[5] import of Venezuelan crude: http://online.wsj.com/article/BT-CO-20110526-714282.html

[6] Connie Mack: http://mack.house.gov/index.cfm?p=PressReleases&ContentRecord_id=4e051314-7a6a-44ef-92d4-dd9b58960549

[7] Jose Cardenas: http://shadow.foreignpolicy.com/posts/2011/05/27/hugo_chavez_in_the_us_crosshairs

[8] reported : http://www.jpost.com/International/Article.aspx?id=220879

[9] build medium-range missile bases: http://blog.heritage.org../../../../../2011/05/17/chavez-iran-and-missiles-a-dangerous-step/

[10] warned: http://www.csmonitor.com/World/terrorism-security/2011/0525/Venezuela-threatens-to-interrupt-US-oil-supply

[11] whip up anti-American sentiment: http://online.wsj.com/article/BT-CO-20110530-704865.html

[12] the Chavez challenge: http://thf_media.s3.amazonaws.com/2011/pdf/wm3198.pdf

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