News & Media

31 January, 2019

US Sanctions on PDVSA

On 28th January, 2019, the President Trump issued an executive order announcing sanctions on Venezuela’s nationally owned oil company, PDVSA. 

US Treasury Department's Office of Foreign Assets Control ("OFAC") designated Venezuela's state-owned oil and gas conglomerate, Petróleos de Venezuela, S.A.  ("PdVSA") as a Specially Designated National ("SDN") under Executive Order ("EO") 13850, "Blocking Property of Additional Persons Contributing to the Situation in Venezuela".  As an SDN, all property and interests in property of PdVSA subject to U.S. jurisdiction are blocked.  In addition, unless licensed by OFAC, the blocking sanctions prohibit the involvement of US persons or the US financial system in any transactions or dealings involving PDVSA or companies 50% or more owned by PDVSA ("Blocked Persons") or their property interests.  

Since the announcement, oil prices in the US have risen 2.32%. Prices are continuing to rise as the day progresses. Concerns about the supply disruptions are the main cause for the rise. The sanctions limit US companies from paying PDVSA for crude. It also inhibits arrangements made with third parties that would potentially send the oil to Russia or China. 

Inchcape recommends, if there are any doubts about particular actions, please consult your legal department for advice.