A former Obama administration official said Tuesday that potential economic sanctions on Venezuela’s oil industry would “would just push Maduro into the arms of the Russians.”
Former Obama Department of Energy official Adam Sieminski told Axios that the U.S. shouldn’t ramp up sanctions against Venezuelan oil in response to abolition of the country’s constitution because doing so would drive the socialist regime into the arms of Russian President Vladimir Putin.
Venezuela has purchased more than $4 billion worth of arms from Russia since 2005, and the countries have been holding joint military exercises since 2008. Venezuela is arguably Russia’s most important economic and military ally in South America, and the two countries have a strong bilateral relationship.
“The short-lived satisfaction of doing something would also give the Maduro regime a scapegoat [the U.S.] to blame for the economic devastation that the regime is responsible for,” Sieminski said.
Long before the sanctions were even considered, the Maduro regime already claimed the U.S. was “waging economic warfare” against Venezuela. Maduro regularly blames the U.S. for what his administration sees as a “national and international boycott of Venezuela” and low global oil prices.
The sanctions freeze the Venezuelan president’s assets under U.S. jurisdiction and prevent Americans from doing business with him. The announcement was a reaction to a Sunday vote to rewrite Venezuela’s constitution in a way that opposition parties say makes the country less democratic.
“The main problem with imposing a ban on either oil imports from Venezuela or crude and product exports to Venezuela (or the crude going to their refineries on Curacao) is that the unilateral nature of the action means that markets would readjust and the lasting impact would mainly be an increase in tanker transportation rates,” Sieminski said.
The new sanctions won’t be a total embargo of all Venezuelan oil, but could include a ban on the sale of U.S. oil and petroleum products to Venezuela along with financial restrictions on the country’s state-owned oil company.
Socialist officials stripped the country’s congress of power in late March in what opposition leaders called a coup. Venezuela’s Supreme Court ruled that all powers vested under the legislative body will be transferred to the country’s highest court. The ruling effectively cedes total control of the country to the Socialist Party, and other countries are now officially calling Venezuela “a dictatorship.”
Venezuela’s socialist economy is already in a state of economic collapse, even though the country has some of the world’s largest petroleum reserves. The government run oil industry supplied 95 percent of Venezuela’s hard currency, so U.S. oil sanctions could accelerate the country’s economic meltdown and force the nation to default on its debts. Venezuela is already in a state of economic collapse and the country’s socialist government is only tightening its grip.
Since the socialist government seized power, 75 percent of Venezuela’s citizens have lost an average of 19 pounds each amid serious food shortages last year, according to research published in February. This is largely because the poor economic policies of the socialist government have left Venezuela cash-strapped and unable to pay for food imports after years of mismanagement, heavy spending on poorly-run government programs, and lack of investment on its oil fields.
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