US warning Venezuelan crude buyers

The US has approached international oil traders, refiners and governments to discourage petroleum business with Venezuela outside explicit sanctions levied in late January, the state department said today.

The department has "had conversations with foreign oil traders, with foreign governments" urging support for national assembly leader Juan Guaido and cutting off Venezuelan president Nicolas Maduro's government from cash generated from oil and gold sales, US special envoy on Venezuela Elliott Abrams said today.

"We have noted we have a wide, broad net with our sanctions, and so we have warned people to be careful not to get caught by activities you may think do not come into but are actually caught by it," Abrams said. "I think we have had a fair amount of success in getting companies to reduce the amount they are buying and, in some cases, end the purchases of oil from the regime."

Abrams declined to identify who the US had approached, saying that the government was monitoring any new vessels or contracts for refined products or crude with Venezuela as the regime seeks new cash buyers to replace the US, once its largest customer. Asked about Indian refiners and specifically Reliance, Abrams said the US had talks with "a very considerable amount of cooperation."

Reliance earlier this month said it would limit its purchases of Venezuelan crude and halt diluent shipments, such as naphtha, essential to that country's crude export program.

The US imposed sanctions on 28 January blocking US sales of naphtha and effectively banning the purchase of the Opec country's crude using US financial services. Authorization for US financial institutions to block or redirect payments to most entities majority-owned by Venezuelan national oil firm PdV expired this morning. All US purchases of Venezuelan oil must end by 28 April.

Payments for any petroleum must go to escrow accounts holding funds until Maduro leaves office. Most western governments recognize Guaido as an interim president to lead a transition government and hold new elections.