- Argentina’s president thinks the US should further sanction the Venezuelan government by blocking the country’s oil exports to the US.
- However, targeting Venezuela’s oil industry is considered the most drastic action the US could take, and it is likely to have severe consequences in both countries.
Argentine President Mauricio Macri wants the US to crack down further on the government of Venezuelan President Nicolas Maduro by blocking its oil imports.
Macri told The Financial Times that such a draconian measure was warranted given the Maduro government’s anti-democratic actions and Venezuela’s continued deterioration.
“I think we should go to a full oil embargo,” Macri said. “Things have gotten worse and worse. Now, it’s really a painful situation. Poverty is going up every day, sanitary conditions are getting worse every day.”
Macri — whose center-right government has led an economic rebound in Argentina and whose party had a strong showing in late-October midterm elections — has been a sharp critic of Venezuela and is the first Latin American leader to call for such an embargo on its oil exports.
The US sanctioned numerous Venezuelan officials this summer, including Maduro. Trump also hinted at a “military option” in Venezuela (which was received poorly in the region) but stopped short of blocking Venezuela’s oil exports to the US.
Venezuela has the world’s largest oil reserves and is the US’s third-largest oil supplier, sending about 800,000 barrels of crude a day to US refiners. It also gets about 95% of its export revenue from oil. Sanctioning Venezuela’s oil sector is generally considered the most drastic action the US could take, as it would harm not only the US oil industry but also severely hinder Venezuela’s ability to buy imported food and medicine and to pay bondholders.
Macri didn’t mention multilateral action against Venezuela’s oil industry, but he said there was “broad support” in Latin America for US doing it. “We have been talking about this many times with many people over the past month,” he told the Financial Times.
Experts in the US have warned against blocking Venezuela’s oil because of the deleterious effects it would have, and US lawmakers — particularly those from states on the Gulf of Mexico, where many refineries are based — have said such a move could raise domestic prices and damage the US economy.
Other legislators have called for a stronger US line against Maduro.
Florida Republican Sen. Marco Rubio said this summer that, “You can expect that every time Maduro does something outrageous, the White Housewill respond with additional sanctions.”
Florida Democratic Rep. Bill Nelson wrote a letter this week urging Treasury Secretary Steven Mnuchin to continue sanctioning Venezuelan officials tied to wrongdoing and to target the country’s state-owned oil company and to “consider banning the import of Venezuelan crude to the United States until constitutional order has been restored.”
Despite Macri’s assurances, there is reason to doubt such action by the US would be well received in Latin America.
“In fact, it is exactly the kind of unilateral policy that isolated the US from the region with regard to Cuba,” Greg Weeks, a political-science professor at the University of North Carolina at Charlotte and editor of the The Latin Americanist academic journal, wrote Wednesday morning.
“To repeat, the embargo has not isolated Cuba, nor will it isolate Venezuela unless the sanctions are multilateral. That would mean no Latin American country buys the oil,” Weeks wrote. “I didn’t hear Macri saying anything about Argentina’s role. It is a bad idea for the US to engage in unilateral sanctions like this.”
Moreover, Weeks noted, aggressive action to isolate Venezuela would likely make deeper partnerships with Russia and China more appealing. The two countries have extended Venezuela at least $US55 billion in credit in exchange for oil.
A Reuters report this summer found that Russia extended considerable financial support to Venezuela’s oil industry, in turn expanding its control of Venezuela’s oil reserves and deepening Caracas’ reliance on its assistance. On Wednesday, Russia’s finance minister said Venezuela had agreed to restructure $US3 billion of its debts to Moscow under previously agreed-upon terms.
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