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US Treasury preps Venezuelan oil export sanctions: source

Washington — The US Treasury Department is crafting sanctions which would prohibit the import of Venezuelan crude oil into the US, one of several sanctions options the White House is considering in response to an expected vote Sunday in Venezuela, an administration source said Tuesday.

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But the Trump administration, which has studied the impact of the potential crude oil import sanctions on the US refining sector, is not expected to impose Venezuelan oil sanctions, at least in the near term, the source said.

"Treasury is preparing them, but that doesn't mean they'll implement them," the source said.

Related: Find more content about Trump's administration in our news and analysis feature.

The Trump administration has yet to decide on its expected sanctions response to the Sunday vote called by Venezuelan President Nicolas Maduro to elect a constituent assembly to redraft the country's constitution, sources, both in and outside the administration, said Tuesday.

Several sources said they expect the initial response from the Trump administration would be to sanction individuals and some institutions within Venezuela. The administration may also move to restrict some US exports of petroleum products, including gasoline and distillate fuel oil, one source said.



"There are lots of options being considered," said one source familiar with the debate within the administration.

This source said several key officials within the administration, including at Treasury and the Department of Energy, oppose any prohibitions on Venezuelan crude imports. Still, the White House has yet to decide on its path forward, this source said.

"We believe the White House has not yet taken a decision regarding the scope of the sanctions, but we see indications that the embargo remains part of ongoing debate," analysts with ClearView Energy Partners said in a note late Monday.

Many within the Trump administration view sanctions on Venezuelan crude imports as having a more devastating effect on the US refining sector than on Venezuela's economy, likely limiting the chances of them being implemented, the administration source said.

Natalie Strom, a White House spokeswoman, declined to comment on the Trump administration's plans.

"We don't comment on speculation of future sanctions," she said Tuesday.

A Treasury Department spokesman did not respond to a request for comment.

In a statement last week, President Donald Trump said that if Maduro follows through on his pledge to rewrite the country's constitution on July 30, the US "will take strong and swift economic actions."

A senior administration official said last week that a ban on Venezuelan imports was one of the options being considered.

If Venezuelan oil sanctions were imposed US refiners, particularly along the Gulf of Mexico, would need to find new sources of heavy crude. While the US now imports about half of the amount of Venezuelan crude than it did 20 years ago, Venezuela remains a key supplier of the US Gulf refining market.

At 795,000 b/d, Venezuela was the largest supplier of imported crude into the USGC in April, according to the US Energy Information Administration, followed by Saudi Arabia at 714,000 b/d.

--Brian Scheid, brian.scheid@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com