The Trump administration is considering major sanctions on Venezuelan oil exports into the US, a policy move which could exacerbate the current heavy crude supply tightness, and cause a months-long dip in US refining margins. A senior administration official said this week that a ban on Venezuelan imports was one of the options being considered, but views on the practicality and effectiveness of such a ban remain divided with the administration. While specifics remain largely unclear, here’s a look at the issues at play, the possible sanctions routes the White House is considering and the expected impacts: On Monday night, President Donald Trump said that if Venezuelan President Nicolas Maduro follows through on his pledge to rewrite the country’s constitution on July 30, the US “will take strong and swift economic actions.” A senior administration official said these actions may be imposed before July 30 and that “all options are on the table.”
Analysts expect that the Trump administration will likely focus on sanctions targeting individuals, at least initially, but said the most effective sanctions would likely target petroleum exports considering that energy accounts for roughly 95% of Venezuela’s export economy.