July 28 (UPI) -- The U.S. Treasury Department is ready with tougher sanctions on Venezuela, including crude oil restrictions, but may hold back, an industry report read.
On Wednesday, the U.S. Treasury Department sanctioned 13 current and former government officials in Venezuela for their role in Venezuelan President Nicolas Maduro's efforts to silence his opponents. The sanctioned individuals include Carlos Erik Malpica Flores, the former vice president for finance at state oil company Petroleos de Venezuela, known also as PDVSA.
The sanctions noose could get tighter if Maduro pushes ahead with a vote Sunday that would likely redraft the Venezuelan constitution in his favor. A source in the administration of President Donald Trump told S&P Global Platts that the Treasury Department is ready with sanctions that could restrict the import of crude oil from Venezuela, the third largest source of imports behind Canada and Saudi Arabia, respectively.
"Treasury is preparing them, but that doesn't mean they'll implement them," the source said.
Tightening sanctions further could strike a blow to the Venezuelan economy as energy represents about 95 percent of its export economy, but it could create U.S. problems as well. Patrick DeHaan, a senior petroleum analyst for price-tracker GasBuddy, and Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, both told UPI this week a potential ban on Venezuelan oil might have unintended consequences.
"A cut of Venezuelan exports would add about 15 to 25 cents a gallon to U.S. gasoline prices," Flynn said.
Platts adds that, for the refiners concentrated on the U.S. Gulf Coast, Venezuela is the largest source of crude oil, ahead of Saudi Arabia, noting those reviewing sanctions in the Trump administration recognize the potential for blowback.
The administration source told Platts that "many within the Trump administration view sanctions on Venezuelan crude imports as having a more devastating effect on the U.S. refining sector than on Venezuela's economy."