In a surprise move by the Trump Administration announced sanctions against the state-owned energy company PDVSA, which was one of the leading energy companies in 2005. The sanctions that are imposed aim to transfer control of Venezuela`s wealth to the opposition forces of socialist Nicolas Maduro. While US companies continue to import oil from the socialist state, funds are held in accounts that are not accessible to the Maduro regime.
The new opposition leader of the Venezuela National Assembly, Juan Guaido, has announced that he is the new President of Venezuela, and he has been backed by the US and Canada as well as other nations. China and Russia are still putting their support in the Maduro camp. Following questionable elections, Maduro has won the top spot yet again – he is in fact the hand-picked successor of Hugo Chavez, the founder of the new socialist state.
Petroleo de Venezuela or PDVSA has been a platform for political attacks recently as it is a vehicle for embezzlement and corruption by officials and business leaders. However, under the sanctions, US companies can continue to purchase oil pumped in Venezuela but payments will be held in accounts and not controlled by the Maduro regime.
WTI Crude traded at the New York Mercantile Echange at 52.21, having a slight bounce after the announcement. However, charts show it is trending lower.
PDVSA will be allowed to continue operations in US-based refineries, and there will be vehicles set up for humanitarian aid and medicines to read the starving masses in the socialist state. Citgo is the refining arm of PDVSA and will operate at 750,000 barrels per day – funds from this complex will be earmarked for said humanitarian aid in the coming weeks and months.