The United States will keep what it calls an oil quarantine on Venezuela even after U.S. forces bombed Caracas and captured President Nicolas Maduro. According to Secretary of State Marco Rubio, this quarantine is as far as the U.S. “running Venezuela” would go.
“We continue with that quarantine, and we expect to see that there will be changes, not just in the way the oil industry is run for the benefit of the people, but also so that they stop the drug trafficking,” the top official said, clarifying earlier statements by President Trump, who said that the United States will be “running” Venezuela for the time being, after dismissing the opposition leader Maria Corina Machado as fit to lead the country following the removal of Maduro.
The U.S. so-called oil quarantine amounts to a blockade on oil tanker traffic, which has disrupted Venezuela’s oil industry to such an extent that PDVSA had to start shutting down wells because it ran out of storage space for the crude it was producing.
According to a Bloomberg report from late December, the Venezuelan state oil company was looking to shut in about 15% of Venezuela’s total oil production of around 1.1 million barrels per day by slashing Orinoco Belt output by 25% to about 500,000 bpd.
Wells pumping extra-heavy crude in the Orinoco Belt and Junin were slated to be the first to be shut, with some wells in the Ayacucho and Carabobo regions coming up next. The latter produces less heavy crude.
Besides the blockade on tankers, U.S. forces have also seized several sanctioned vessels for carrying Venezuelan crude. Secretary Rubio said, “That’s a tremendous amount of leverage that will continue to be in place until we see changes that not just further the national interest of the United States, which is number one, but also that lead to a better future for the people of Venezuela.”
By Irina Slav for Oilprice.com
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