In advance of a July 30 vote that could strip Venezuelan lawmakers of their constitutional power, Cuban-American politicians are going after Venezuela’s jugular: the largest proven oil reserves in the world.
Over the past few weeks, as the tough talk on Venezuela reaches a fever pitch, South Florida lawmakers are uniformly behind a ban on Venezuelan oil imports to the United States, a drastic step that could deal a critical blow to Venezuela’s slumping oil industry.
The lawmakers seem convinced that the White House will do something drastic, going beyond the long-used tactic of issuing sanctions on individual Venezuelan government officials suspected of money laundering and drug trafficking.
“We will have a swift and firm response from this administration,” Miami Rep. Ileana Ros-Lehtinen said last week.
“If this happens on July 30, I am convinced without any doubt that the President of the United States will act swiftly and decisively to ensure that there will be measures taken against individuals and potentially sectors for the unconstitutional overthrow of democracy and the replacement with a Cuban-style regime,” Sen. Marco Rubio said on Wednesday.
For now, Congress is united in its disgust toward Venezuelan President Nicolás Maduro, but some lawmakers — even among Republicans — disagree over how far the U.S. should go if Maduro’s constituent assembly comes up for its scheduled vote.
The Cuban Americans favor a ban on Venezuelan oil imports, a far-reaching action that could further cripple an economy already mired in hyperinflation. But some leading foreign-policy voices in Congress, including Senate Foreign Relations Chairman Bob Corker, a Tennessee Republican, have doubts.
“I believe there’s a crisis coming in Venezuela, and I think we need to be careful about not making ourselves the focus of that crisis,” Corker said. “Sometimes what we do unifies the chavistas.”
Corker, who is close to Trump, added that he plans to meet with Rubio soon to discuss possible sanctions.
Virginia Sen. Tim Kaine, who ran against Trump as Hillary Clinton’s 2016 running mate, echoes Corker’s concerns. Kaine said he was “pleased” with the Trump administration’s recent actions in Venezuela, but stopped short of endorsing oil sanctions.
“Before agreeing to sanctions on an industry sector, I would want to hear from the Administration how that would impact the Venezuelan people. Sanctions should be designed to punish and deter bad actors and minimize impact on suffering people,” Kaine, a member of the Foreign Relations Committee, said in a statement provided to the Miami Herald.
Venezuela exported 291 million barrels of oil and oil products to the United States in 2016. The United States buys nearly half of Venezuela’s oil, and oil revenues account for 95 percent of Venezuela’s export earnings, according to OPEC.
In contrast, Venezuelan oil accounts for just eight percent of U.S oil imports, according to the U.S. Energy Information Administration.
Lawmakers are also worried about the potential for a Russian takeover of U.S.-based oil refiner Citgo, a subsidiary of Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A., known as PDVSA.
A Russian state-owned oil company called Rosneft acquired a 49.9 percent stake in Citgo as collateral for a $1.5 billion loan signed in November 2016. If the Venezuelan government needs additional cash, they could hand over their oil assets, including the Houston-based Citgo, to the Russians.
“There’s already been one default on a loan from Russia to Venezuela,” said Sen. Bob Menendez, D-N.J, a Cuban-American lawmaker who supports tough sanctions against Venezuela. “If in fact that default or any others is used by Rosneft to get the majority of shareholding of PDVSA, which owns Citgo and all of its infrastructure in the United States, we could have a extensive energy infrastructure here in the United States owned by the Russian government. I think we can all agree that the last thing we need to do is open the doors of our critical infrastructure to Russian interference.”
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