US to withdraw diplomats from Venezuela: Update 2

Adds additional context, updates throughout.

The last remaining US diplomats will leave Caracas as they have become a "constraint" on US policy, secretary of state Mike Pompeo said.

The decision is a tacit acknowledgment that the US policy of pressuring Venezuelan president Nicolas Maduro to leave office is not likely to yield quick results. Pompeo just yesterday argued that continued US diplomatic presence in Caracas was necessary to support National Assembly speaker Juan Guaidó, whom Washington recognizes as Venezuela's interim leader. But on the same day the Maduro government demanded that the US diplomats leave Venezuela within 72 hours - and Pompeo decided to comply with that request.

"It certainly is not a display of any lack of confidence in (Guaidó)," State Department special Venezuela envoy Elliott Abrams said today. "The fact is that today the regime has the guns."

Both Washington and Caracas claimed victory today. Pompeo said removing US diplomats would remove constraints on US policy of delivering humanitarian aid into Venezuela across its borders with Colombia and Brazil. But Abrams contradicted that argument, saying there was no linkage between withdrawing diplomats and the aid delivery.

The Maduro government will "maintain channels of communication and dialogue with the US Government as long as this process is carried out within the frame of a relationship based upon equality and mutual respect," foreign minister Jorge Arreaza said. Caracas has offered to convert the US embassy into an "interest section," allowing the US diplomats to stay in place under the auspices of a third power. But Washington has decided not to do that as it would have implied continued recognition of the Maduro government, Abrams said.

The US in January defied Maduro's order to remove all diplomats from Caracas, reflecting expectations for a quick transition. But that has changed now. "We do not believe the regime, on the one hand, has the ability to tell us when to leave, on the other hand, does not have the ability to protect us if we stay," Abrams said.

Washington at the same time will continue to step up economic and financial pressure on Caracas to encourage a transition of power to Guaidó, Abrams said. "You will see in the coming days some very significant additional sanctions," he said.

Pompeo yesterday blasted Cuba for its support of Maduro and condemned Russian state-owned Rosneft for "throwing a lifeline to the regime." Rosneft continues to buy oil from Venezuela´s state-owned PdV despite US sanctions and in fact has stepped up purchases in recent weeks, Pompeo said.

Rosneft in recent years lifted Venezuelan crude in repayment of previous loans to Caracas. It has begun to sell naphtha to PdV to make up for lost US supply after Washington imposed sanctions on 28 January, according to Abrams.

Rosneft called Pompeo's statement "groundless and biased" and denied it is skirting US sanctions, which at any rate do not yet restrict non-US buyers from lifting Venezuelan crude.

Pompeo also said Washington is asking another Venezuelan offtaker – India – "not to be an economic lifeline to the Maduro regime."

Indian state-owned refiners are importing minimal volumes at best from Venezuela but some private-sector refiners are buying shipments, M. M. Kutty, the top civil servant in the Indian oil ministry, said at the IHS-CERAWeek conference in Houston yesterday.

US sanctions are hitting India twice, by imposing constraints on its crude imports from Iran and Venezuela. Pompeo said the US and India are having "good conversations" about limiting Indian imports from those destinations. "In the same way that India has been incredibly supportive of our efforts on Iran, I am confident that they too understand the real threat to the Venezuelan people."

But India still insists on extending its waiver from US sanctions targeting Iran, Kutty said.

Turkey and China notably escaped condemnation from Pompeo, despite their continued support of the Maduro government. But Abrams said US officials continue to negotiate a possible solution to the Venezuela crisis with Beijing. And Abrams said entities facilitating Venezuelan gold exports to Turkey could be subject to sanctions.

Pompeo instead focused his criticism on Havana, which he says continues to take 50,000 b/d of Venezuelan crude.

Shipping data shows little or no Venezuelan oil is currently reaching Cuba.

Venezuela's opposition-controlled National Assembly yesterday called for an end to that arrangement. White House national security adviser John Bolton, citing the opposition leader's call, warned of potential US sanctions to providers of maritime and insurance services enabling that trade.

Inside Venezuela, living conditions are increasingly grim. Much of the country is still without electricity and water supply following a catastrophic blackout that started on 7 March.

In a national address this evening, Maduro said water systems were undergoing repair, but promised that all Venezuelans would receive a blue rainwater tank to be better prepared.