US imposes embargo on Venezuela

The US issued an economic embargo against Venezuela, stepping up financial pressure against the Opec-member nation as a defiant President Nicolas Maduro maintains control over the country.

The embargo blocks the transfer of any property or shares of property in the United States held by the government of Venezuela or anyone determined by the Treasury and State departments to be supporters of the Venezuelan government. Licenses exempting certain business — including those for US independent refiner Citgo which is controlled by Venezuelan national oil firm PdV, and Chevron's minority stake in a Venezuelan synthetic crude joint venture with PdV — remain in place.

Venezuela joins Iran and Cuba on a short list of countries the US has placed under embargo, an expansion of sanctions aimed at discouraging any countries from doing business with those nations. But the tactic has not dissuaded Maduro supporters China or Russia from continuing business with any of the other embargoed countries.

It was not immediately clear whether the action would affect efforts by former Canadian mining firm Crystallex to pursue shares of Citgo to satisfy a $1.4bn arbitration award against Venezuela. The opposition has lobbied the US to block any such transfer following last week's ruling by the US Third Circuit Court of Appeals upholding Crystallex's efforts. The decision could lead to an auction of the controlling company's shares later this year, a move that has rattled lenders and affirmed a path for companies seeking payment for more than $150bn in arbitration awards and other debt.

The US imposed sanctions on Venezuela in January to cut off revenue to the Maduro government and support new elections headed by National Assembly leader Juan Guaido. The US and more than 50 western governments recognize Guaido as an interim president.

Guaido has installed directors of Citgo and PdV, an action upheld by the Delaware Chancery Court late last week. But the opposition leader has not expanded his control inside Venezuela, and an April attempt to depose Maduro fizzled.

US crude imports from Venezuela, once the third-largest supplier of heavy, sour crude, fell to zero in May.