US sanctions on Rosneft undermine global free trade

US sanctions on Rosneft undermine global free trade

The United States has ramped up pressure on Venezuela by blacklisting a subsidiary of Russian state oil major Rosneft that President Donald Trump's administration said provides a financial lifeline to President Nicolas Maduro's government. Al Jazeera reports in its article US imposes sanctions on Russian oil firm over Venezuela that the US Treasury Department on Tuesday imposed sanctions on Rosneft Trading SA, the Geneva-based trading unit of Rosneft, as Washington targeted Moscow over its backing of Maduro's government. The move further complicates already-fraught US-Russian relations.

Russia condemned the sanctions, saying they amounted to unfair competition and would not deter Moscow from continuing to work with Venezuela. Russia's Foreign Ministry said the move would further damage relations with Washington and undermine global free trade.

Venezuelan Foreign Minister Jorge Arreaza called the US action "unilateral" and said Washington continued "attacking the Venezuelan people".

US officials accused the Rosneft subsidiary of propping up the Venezuelan oil sector and engaging in "tricks" and ship-to-ship transfers to actively evade American sanctions. "I think this is a very significant step and I think you will see companies all over the world in the oil sector now move away from dealing with Rosneft Trading," Elliott Abrams, the US special representative for Venezuela, told reporters.

Treasury Secretary Steven Mnuchin added in a statement: "The United States is determined to prevent the looting of Venezuela's oil assets by the corrupt Maduro regime."

Rosneft called the sanctions an "outrage" and said that US authorities, in conversations with the company, had repeatedly recognised that it was not breaching any restrictions. Rosneft said the US Treasury Department has not presented any evidence of violations.

The US in January 2019 recognised Venezuelan opposition leader Juan Guaido as the OPEC nation's legitimate interim president and has ratcheted up sanctions and diplomatic pressure in the aftermath of Maduro's 2018 re-election that was widely described as fraudulent.

Maduro remains in power, backed by Venezuela's military as well as Russia, China and Cuba. His clinging to power has been a source of frustration for Trump, US officials have said privately. Along with the sanctions, the US also issued a general licence allowing companies 90 days to wind down their transactions with Rosneft Trading.

Tuesday's sanctions freeze any US-held assets of Rosneft Trading and the subsidiary's chairman of the board and president, Didier Casimiro, who also serves as a vice president of the parent company.

Rosneft shares fell 2.7 percent, underperforming oil prices and the broader Russian index. The sanctions announcement came soon before the close of the Russian market.

It was unclear whether Tuesday's move will reduce export revenue flowing to Maduro's government, which continues to enjoy Moscow's backing in a standoff reminiscent of the Cold War.

 

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