Maduro Asks OPEC For Help As U.S. Sanctions Bite

Nicolas Maduro has asked OPEC to support one of its founding members—Venezuela—against the U.S. sanctions on the Latin American country’s oil industry and denounce the “shameless dispossession” of Venezuelan assets, but Maduro’s plea has fallen on deaf ears, Reuters reported on Monday.

At the end of January, the U.S. imposed sanctions on PDVSA to “help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela. The path to sanctions relief for PdVSA is through the expeditious transfer of control to the Interim President or a subsequent, democratically elected government,” Secretary of the Treasury Steven T. Mnuchin said.

The U.S. and many European countries have recognized Juan Guaidó as the interim president of Venezuela, while Maduro is supported by Russia, China, and Turkey.

The U.S. sanctions block all payments to PDVSA accounts, and buyers of Venezuelan crude are directed to deposit payments in a separate account, to which PDVSA doesn’t have access.

In a January 29 letter sent to OPEC’s Secretary General Mohammad Barkindo, which Reuters has seen, Maduro writes:

“Our country hopes to receive the solidarity and full support of the member countries of OPEC and its ministerial Conference, in the fight we are currently having against the illegal and arbitrary intrusion of the United States in the internal affairs of Venezuela.”

I seek “your firm support and collaboration to jointly denounce and face this shameless dispossession of ... important assets of one of the members of OPEC,” Maduro wrote.

The Socialist leader’s argument in seeking support from OPEC is that the sanctions would have impact on the global oil market and prices and that they represent a risk to other members of the cartel.

According to an OPEC source, however, the cartel has declined to make any official statement on the issue, because it is concerned with oil policy, not politics.

Last year, when asked by Iran for support, OPEC did not issue any formal comments on the U.S. sanctions on Iran either.

By Tsvetana Paraskova for Oilprice.com