The Treasury's Office of Foreign Assets Control (OFAC) has personally sanctioned Venezuelan President Nicolas Maduro, adding him to the list of specially designated nationals, freezing any U.S. assets he may have and generally blocking U.S. persons from transactions involving him. Today's sanction is a follow up to last week's announcement by the Trump administration in which the Treasuey revealed sanctions on 13 senior Venezuelan officials in an attempt to deter Maduro from moving forward with plan to rewrite Venezuela’s constitution in what opponents regard as a potential power grab move. Needless to say, that particular attempt failed.
Today's escalation comes in response to this weekend's election which gives Venezuela's ruling party new, sweeping powers. State Department spokeswoman Heather Nauert charges the new assembly formed from this election “is designed to replace the legitimately elected National Assembly and undermine the Venezuelan people’s right to self-determination.”
In response to US criticism of the move, Reuters reported that Maduro told a crowd of supporters: "Why the hell should we care what Trump say? We care about what the sovereign people of Venezuela say."
As we noted yesterday, and as observed earlier today, oil has spiked on concerns that escalating US sanctions against Venezuela could cripple the local oil industry, sending oil prices as much as $5-7/b higher according to a calculations by Barclays.
As discussed previously, Barclays Warren Russell explained what could happen should Trump expand Venezuela's sanctions to impact its oil sector: "a sharper and longer disruption (exceeding three months) could raise oil prices at least $5-7/b and flatten the curve structure despite an assumed return of some OPEC supply, a more robust US shale response, and weaker demand. It may be just the opportunity OPEC needs to exit its current strategy. US producer hedging activity would pick up if WTI moves to $50-55, limiting price upside potential"...