The Venezuelan opposition leader, Juan Guaido, claims to have seized the state asset after the US imposed a series of sanctions on the country’s state oil firm, PDVSA.

The U.S. argues that sanctions applied on PDVSA aim to prevent the incumbent president Nicolas Maduro from controlling all of the company, given that the U.S. considers former vice-President Juan Guaido Venezuela’s rightful leader.

U.S. Secretary of Treasury Steve Mnuchin said the sanctions’ aim was to “change behavior”.

“The purpose of sanctions is to change behavior. So when there is a recognition that the company is the property of the rightful rulers, the rightful leaders, then indeed that money will be available to Guaido,” said Mnuchin.

U.S. sanctions will block PDVSA from accessing assets under U.S. jurisdiction and ban Americans from any transactions with the oil firm. However, Mnuchin said that PDVSA’s subsidiary Citgo will continue its refinery operations if the company transfers its revenue to a frozen account in the U.S.

Venezuela, once one of the richest oil-producing nations, is struggling to cope with a prolonged crisis after global oil prices fell sharply in 2014. 95 percent of the country’s revenue comes from the oil sector.

The re-election of leftist president Nicolas Maduro in May 2018 sparked protest from his opponents and the West, who claim the election result was rigged. Maduro, former vice president of the late charismatic leader Hugo Chavez, claimed his victory as a triumph against the Western imperialism.

The Impact of US Sanctions on Venezuelan Oil Prices

Global oil prices rose three percent after Washington’s embargo on Caracas on Tuesday Jan. 29, raising worries that sanctions will disrupt global supply.

The price of Brent crude oil increased $1.42 to $61.35 per barrel or 2.4 percent. While West Texas rose 2.6 percent to $53.36 per barrel, as Reuters reported.

The Venezuelan export volume will not be removed from the markets but will be rerouted to other countries, said Paola Rodriguez-Masiu, an analyst at consultancy Rystad Energy.

According to Refinitiv’s logistics and trade shipment data, Venezuela’s oil exports fell from 1.6 million barrels per day in 2017 to 1 million barrel per day in 2018. It is estimated that the export will drop another 500,000 barrels per day due to the sanctions.

The Sanctions May Worsen Venezuela’s Humanitarian Crisis 

The sanctions may hurt U.S. refineries, but ordinary Venezuelans could suffer the most from the economic embargo, as former U.N. rapporteur Alfred de Zayas told the Independent. The former senior lawyer at the U.N. High Commissioner for Human Rights presented his Venezuela report about possible crimes against humanity to the U.N. Human Rights Council (HRC) in September. He was disappointed that his presentation did not spark the large debate he thinks it deserves.

In late 2017 he led a fact-finding mission to Venezuela. Overdependence on oil and a corrupt administration have hurt the country’s economy, but he believes the U.S., the E.U. and Canada’s sanctions are causing the crisis.

The report stated, “Modern-day economic sanctions and blockades are comparable with medieval sieges of towns. Twenty-first century sanctions attempt to bring not just a town but sovereign countries to their knees.”

Maduro has been criticized for allegedly committing crimes against humanity, especially in the handling of anti-government protests. According to the United Nations human rights office (OHCHR), 40 protestors have died, and around 850 have been detained, including 77 children in recent anti-Maduro demonstrations.

OHCHR spokesperson, Rupert Colville, said there were 696 detained protestors on Jan. 23, the highest figure of anti-Maduro protests alone.

Many Venezuelans cannot afford to buy their basic needs and have turned to seek a better life in neighboring Colombia.

International Response

While the West and other Latin nations such as Argentina, Brazil and Colombia support the interim president Guaido, China, Turkey, Mexico, Cuba and Russia voice their support for Maduro and fault Washington for worsening the crisis in Venezuela. The EU has refrained from voicing support for either Maduro or Guaido.

As for troop deployment, despite opposing Maduro, hard-right Colombian President Ivan Duque said in September he would not send troops to Venezuela although there are now Venezuelan troops at the Colombian border.

The U.S. has hinted at military intervention and there are reports that Russian paramilitary forces are already in the country.

But the question is, will Russia and China’s support be enough to keep Maduro in power?