Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. sets deadline for foreigners dealing in Venezuela oil

Published 01/02/2019, 14:50
Updated 01/02/2019, 14:50
© Reuters. FILE PHOTO: An oil tanker is seen in the sea outside the Puerto La Cruz oil refinery in Puerto La Cruz

© Reuters. FILE PHOTO: An oil tanker is seen in the sea outside the Puerto La Cruz oil refinery in Puerto La Cruz

WASHINGTON (Reuters) - Non-U.S. entities buying oil or petroleum products from Venezuela's state-owned PDVSA in deals that involve the U.S. financial system, brokers or people must be wound down by April 28, the U.S. Treasury Department said in a notice posted early on Friday.

The notice clarifies some of the confusion that has surrounded U.S. sanctions imposed on Venezuela earlier in the week. Besides the United States, Venezuela sells its oil to buyers around the world, including India and Europe, and the country has been seeking buyers elsewhere to replace the roughly 500,000 barrels a day it sells to the United States.

U.S. officials imposed sanctions on state-owned Petroleos de Venezuela, or PDVSA, this week, a move Maduro has called illegal.

The global oil industry has since sought to sort out the large-scale sanctions, which froze the assets of PDVSA and also require U.S. firms to pay for oil into accounts controlled by the country's opposition party head and self-proclaimed interim president, Juan Guaido. Even before Friday's notice, European buyers had pulled back on taking shipments from Venezuela due to concerns about how to make payments.

Friday's notice said non-U.S. entities that involve U.S. brokers or the U.S. financial system must wind down those transactions by the end of April. Much of the world oil market is transacted in dollars, and therefore would be subject to U.S. oversight.

Spokespeople for Vitol and Trafigura, two of the largest merchant traders in commodities, both said Friday they will comply with all applicable sanctions.

European governments are also considering sanctions, which would cut off Venezuela's ability to do business in euros as well.

In addition, Americans who work for non-U.S. companies located outside the United States and Venezuela have until March 29 to conduct "certain maintenance or wind-down transactions," according to the notice dated Jan. 31 and posted on the department's website overnight.

The department's Office of Foreign Assets Control also addressed other issues related to looming U.S. sanctions on Caracas' state-run oil company aimed at putting pressure on President Nicolas Maduro who the Trump administration seeks to oust from power.

The notice offers more details about transactions that are allowed and prohibited, and offers guidelines on bondholders' rights regarding U.S. refiner Citgo Petroleum as well as details on what constitutes "maintenance" transactions.

© Reuters. FILE PHOTO: An oil tanker is seen in the sea outside the Puerto La Cruz oil refinery in Puerto La Cruz

U.S. President Donald Trump and his administration have thrown their support behind Guaido.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.