Administration officials estimate that the sanctions could result in export losses of $11 billion over the next year, a crippling blow for a country that already lacks hard currency to buy sufficient food and medicine. Yet some analysts believe those assessments are overblown.
“The sanctions will deal a meaningful blow to the Maduro administration’s cash flow, but the effects will not be as harsh as the United States expects,” said Paola Rodriguez-Masiu, a Venezuelan oil market analyst for Rystad Energy, a Norwegian consultancy. “The oil that Venezuela currently exports to the United States will be diverted to other countries and sold at lower prices.”
Venezuela sells 300,000 barrels a day to India and 240,000 to China, and it makes additional sales to other countries in Europe and Southeast Asia. Many countries can be expected to buy Venezuelan crude if it is offered at deeply discounted prices. Much of the oil that has been shipped to China in recent years has been earmarked for debt repayment, but Beijing has in recent years eased pressure on Venezuela for repayment.
The most painful aspect of the sanctions could be the immediate blocking of sales of American light crude oil to Venezuela, which buys about 120,000 barrels a day to blend with its heavier oil. Without it, Venezuela’s gummy production cannot easily flow through pipelines to refineries and export terminals. Without the American supply, Pdvsa will be forced to buy the light oil from African producers, which could mean longer shipping times and higher costs.
While experts and people in the energy industry were debating the implications of the sanctions, many in Venezuela seemed to know little about the measure and its potential effects. State-run media reports have characterized the sanctions as the linchpin of an American-orchestrated coup attempt, but provided little information about the measure’s possible impact.
For Blanca Urdaneta, who sells candles to parishioners outside a church in downtown Caracas, news of the escalating tensions between Venezuela and the United States just added to her worries.
“That will spark a war,” said Ms. Urdaneta, adding that she had lost faith in both Mr. Maduro and the opposition to fix the country’s problems. “And it will bring even more misery to the Venezuelan people.”