The U.S. oil industry doesn’t want sanctions against Venezuela

August 9, 2017, 10:15pm

The U.S. Treasury has imposed sanctions against eight more Venezuelan officials — including Hugo Chavez’s older brother — punishing them for bolstering the dictatorship of President Nicolas Maduro by helping create a new legislative body via a “sham” vote last week.

However, economic sanctions aimed at Venezuela’s oil industry are yet to materialize, after the U.S. oil lobby pressured the White House, claiming that blocking exports from Venezuela would hurt U.S. consumers as a result of increased fuel costs.

Venezuela is the third-largest supplier of crude oil to the U.S., and having to find alternative sources would be disruptive and expensive, according to the companies processing Venezuela’s oil.

Letters sent by lobbying groups and some Republican Congress members to the White House claim that any sanctions on Venezuela’s oil industry “could significantly impact fuel costs for U.S. consumers” and put more than half a million refining-related jobs in jeopardy.

But some dispute the notion that sanctions on Venezuelan oil would impact U.S. consumers. “We do not believe there would be significant impact on retail prices to U.S. consumers,” a Wells Fargo analysis on proposed sanctions said.

The new sanctions bring to 30 the number of individuals punished by the U.S. since April, when anti-government protests began. The establishment last week of a Constituent Assembly packed with Socialist Party loyalists led to widespread criticism.

“President Maduro swore in this illegitimate Constituent Assembly to further entrench his dictatorship, and continues to tighten his grip on the country,” Treasury Secretary Steven Mnuchin said in a statement announcing the new sanctions.

While the financial sanctions on individuals connected to the regime have been broadly welcomed, some are calling for more severe financial penalties that would hit the country’s oil industry, upon which its economy still relies heavily.

Last month, President Trump warned he would take “strong and swift economic actions” against Maduro if he went ahead with plans to seat the assembly. While the administration told Reuters those actions are still under consideration, it appears the oil lobby has succeeded in at least delaying such moves.