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Venezuelan oil sanctions carry risks for U.S. economy

Accra, July 28 –
(UPI/GNA) – The U.S. Treasury Department is ready with tougher sanctions on
Venezuela, including crude oil restrictions, but may hold back, an industry
report read.

On Wednesday, the
U.S. Treasury Department sanctioned 13 current and former government officials
in Venezuela for their role in Venezuelan President Nicolas Maduro’s efforts to
silence his opponents.

The sanctioned
individuals include Carlos Erik Malpica Flores, the former Vice President for
Finance at State Oil Company Petroleos de Venezuela, known also as PDVSA.

The sanctions noose
could get tighter if Maduro pushes ahead with a vote on Sunday that would
likely redraft the Venezuelan constitution in his favor.

A source in the
administration of President Donald Trump, told S&P Global Platts that the
Treasury Department is ready with sanctions that could restrict the import of
crude oil from Venezuela, the third largest source of imports behind Canada and
Saudi Arabia, respectively.

“Treasury is
preparing them, but that doesn’t mean they’ll implement them,” the source
said.

Tightening sanctions
further could strike a blow to the Venezuelan economy as energy represents
about 95 percent of its export economy, but it could create U.S. problems as
well.

Patrick DeHaan, a
Senior Petroleum Analyst for price-tracker GasBuddy, and Phil Flynn, a Senior
Market Analyst for the PRICE Futures Group in Chicago, both told United Press
International that, this week a potential ban on Venezuelan oil might have
unintended consequences.

“A cut of
Venezuelan exports would add about 15 to 25 cents a gallon to U.S. gasoline
prices,” Flynn said.

Platts adds that,
for the refiners concentrated on the U.S. Gulf Coast, Venezuela is the largest
source of crude oil, ahead of Saudi Arabia, noting those reviewing sanctions in
the Trump administration recognize the potential for blowback.

The administration
source told Platts that “many within the Trump administration view
sanctions on Venezuelan crude imports as having a more devastating effect on
the U.S. refining sector than on Venezuela’s economy.”

GNA

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