By Irina Slav
Venezuela will continue trading with the United States despite the fact Washington broke off diplomatic relations following president Nicolas Maduro’s inauguration for a second term in office, which the U.S. and a host of other countries decried as illegitimate.
Turkey’s Anadolu Agency quoted Maduro as saying, “We have multifaceted relations with the U.S. We’ve cut off the diplomatic and political ties with the U.S. government but our other relations will continue. If they want to buy potatoes, we will sell potatoes. If they want to buy oil, we will sell oil. If they do not want to buy anything, we will not sell.”
Venezuela is a major supplier of heavy crude to Gulf Coast refineries, but it is not the only one. Canada is by far the largest supplier of heavy crude to U.S. refiners and Mexico is also a large exporter to its neighbor in the north.
Meanwhile, the political situation is Venezuela continues to deteriorate after the president of the opposition-dominated National Assembly, which the Maduro government does not recognize, declared himself interim president and the last elections illegal. President Trump was quick to recognize the opposition leader, Juan Guaido, as the legitimate president of Venezuela.
Earlier this month, reports emerged that Washington was once again considering a blanket oil import ban on Venezuelan crude following Maduro’s inauguration. At the time experts weighed in skeptically, saying this could lead to a pretty sharp increase in gasoline prices, which would make the measure unpopular. So far, however, there is no official word of oil sanctions.
In the meantime, Venezuela is being rocked by anti-government protests and Guaido has called for more people to take to the streets to topple Maduro. The call came on the heels of an ultimatum from the European Union for Caracas to set a date for new elections. At the same time, Maduro has publicly demonstrated he has the support of the army with a round of military exercises amidst the protests.
By Irina Slav for Oilprice.com