9 Aug 2019: U.S. tightens sanctions against former regional powerhouse
The reports of the imminent demise of the regime of Nicolas Maduro of Venezuela (like the death of Mark Twain in 1897) have been greatly exaggerated. Venezuela has been subject to ever tightening sanctions since the Maduro regime cracked down on civilian protests in 2014. Citing severe human rights violations, President Obama imposed sanctions on a number of Venezuelan individuals. Additional sanctions were imposed the following year. President Trump significantly broadened and tightened sanctions on Venezuela, in particular after the May 2018 presidential election in the country, which was deemed rigged. Throughout this period, the country’s economy crumbled and crude oil production and exports fell as sanctions started to bite. Refining output has suffered as well. However, despite the pressure from (most of) the international community and growing protests from his own population, Mr. Maduro is still in power. At this point, one must conclude that to try to predict if (or when) he will leave is a fool’s errand. However, it appears that until he does, Venezuela’s (oil) trading partners will be limited to China, Russia and to a lesser extent India. This has already had a profound impact on the tanker industry (both for crude oil and product tankers).
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