March 20 (UPI) -- New U.S. sanctions on Venezuelan individuals and digital currency transactions are a largely symbolic move from the White House, a risk consultant group said.
The U.S. Treasury Department followed through on an executive order signed by President Donald Trump by targeting a digital currency designed to maneuver around existing sanctions on President Nicolas Maduro's Venezuela.
"President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis," U.S. Treasury Secretary Steven Mnuchin said in a statement. "Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the petro digital currency -- a ploy that Venezuela's democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid."
The executive action prohibits transactions made with the digital currency on behalf of a Venezuelan government facing increased isolation. Four current and former Venezuelan officials were also targeted for corruption.
Washington already imposed sanctions on the Venezuelan government and military officials in December in response to allegations of corruption and repression under the Maduro administration.
High debt and U.S. sanctions are limiting financing for the state oil company, Petróleos de Venezuela, or PDVSA. Secondary sources reporting to economists at the Organization of Petroleum Exporting Countries said Venezuela produced on average 1.5 million barrels of oil per day last month, a decline of almost 30 percent from the 2016 average.
Joe McMonigle, a senior energy analyst at Hedgeye Risk Management, said the sanctions won't have much of a direct impact on the energy sector.
"In our view, this petro-currency approach is really only viable in Maduro's own mind," he said in comments emailed to UPI. "Trump's executive order is mostly symbolic to send Maduro a message that the walls are closing in on him as the U.S. shuts down what he views as a loophole in U.S. sanctions."
Targeting Venezuelan oil carries risk for the United States. For the week ending March 9, it was the third-largest exporter of oil to the United States, behind Saudi Arabia.
Trump last year considered tightening sanctions on Venezuela, where energy represents about 95 percent of its export economy. That move would've created problems for the United States because, for the refiners concentrated on the U.S. Gulf Coast, Venezuela is one of the largest sources of crude oil.