(BROOKLYN, New York): The Venezuelan government has vowed to continue to fulfil its oil commitments to Cuba despite new sanctions imposed on President Nicholas Maduro’s administration by the United States. The April 5, 2019, communication through the US Department of State via the US Treasury Department, outlines sanctions that the US is imposing on companies doing business with Venezuela, which they claim are enabling them to support the island nation of Cuba with oil shipments.
The sanction notification from the Treasury’s Office of Foreign Assets Control (OFAC) states that it has designated two companies operating in the oil sector of the Venezuelan economy, pursuant to an Executive Order (E.O.) 13850, as amended.
Additionally, the OFAC note stated that OFAC had identified one vessel that transported oil from Venezuela to Cuba, as a “blocked property” already in contravention to the E.O of 13850 and that the blocked vessel has been indicated to be a wholly owned entity that is already blocked and/or sanctioned by the US
Separately, OFAC is also identifying 34 vessels as blocked property of Petroleos de Venezuela, S.A. (PdVSA), which was designated January 28, 2019, for operating in the oil sector of the Venezuelan economy.
The three vessels the OFAC had clearly identified were:
Despina Andrianna is a crude oil tanker (IMO: 9182667) which is said to have delivered crude oil from Venezuela to Cuba during February and March 2019. Ballito Bay Shipping incorporated is based in Monrovia, Liberia, and is the registered owner of the vessel, Despina Andrianna. ProPer In Management Incorporated is based in the port city of Piraeus, Athens, Greece, and is the operator of the vessel, Despina Andrianna.
In a corresponding note on the sanctions, the US State Department issued a statement that said in part:
“The former Maduro regime continues to line its pockets with the profits from natural resources that rightly belong to the people of Venezuela. Meanwhile, Cuba is propping up the former government and facilitating its repression of the Venezuelan people, through its military and intelligence support to Maduro.
“The United States is taking action to curtail this and other ongoing corrupt activities of Nicolas Maduro and malign actors. We encourage companies, banks, and other institutions to refrain from providing services that support his repressive practices. We also urge countries to take appropriate legal measures to deprive Maduro and his cronies of assets held overseas and to prevent travel to their countries,” along with promising to put the full weight of US power on that of the Maduro administration.
Foreign minister, Jorge Arreaza, responded to the sanctions and said that we would continue to “fulfil our commitments to Cuba”, and he went further to add that “When the conventional power of capitalism attacks you, you have to know how to respond through non-conventional means, always respecting international law.”
The pressure is continually mounting on the Maduro regime, this among other national issues that he is faced with in addition to other international demands for him to step down and allow for the self-appointed president of Venezuela, Juan Guaidó, who is also the president of the Venezuelan national assembly, to take the helm of the flagging country. In addition to the ongoing political pressure, Venezuela has been amid a current electricity outage crisis that the Maduro administration has blamed squarely on the covert actions of the United States.
Also, the country with the largest known oil reserves watches as their once vibrant oil sector continually deteriorates. OPEC has announced in their monthly OPEC report, Venezuela reported an output of 960 thousand barrels per day (BPD), whereas secondary sources said 732 thousand BPD. These numbers are down from 1,432 and 1,021 thousand BPD, respectively. According to secondary sources, Venezuela’s output averaged 1,911 and 1,354 thousand BPD in 2017 and 2018, respectively.
Venezuela’s oil production has also been crippled by successive rounds of US sanctions targeting state oil company PDVSA. OFAC measures have shut off PDVSA from financial markets, prohibited debt re-negotiations, frozen PDVSA’s US subsidiary CITGO, stopped imports of US-made refining products and imposed a de facto embargo on Venezuelan oil exports to the US. Oil shipments to US refineries fell from around 500 thousand BPD in late January to zero following a winding down period.