Venezuela threatens to interrupt US oil supply

The threat came in response to new US sanctions on Venezuela's state oil company, which currently provides about 10 percent of American oil imports.

By , Correspondent

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    Venezuela's Foreign Minister Nicolas Maduro (l.) and Venezuela's Oil Minister and President of Petroleos de Venezuela SA (PDVSA), Rafael Ramirez attend a joint press conference in Caracas, Venezuela, on Tuesday, May 24. Maduro threatened to interrupt US oil supply after Washington placed sanctions on the Venezuelan state oil company, this week.
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Venezuela's foreign minister warned late Tuesday that it could no longer guarantee regular oil shipments to the United States after Washington placed sanctions on the Venezuelan state oil company, Petroleos de Venezuela SA (PDVSA), this week. The spat underscores long-running tensions over what Venezuelan President Hugo Chávez sees as America's disproportionate, unjust exercise of power on the world stage.

“There are several proposals that are being evaluated by President [Hugo] Chávez to respond to the United States’ imperialist pretensions,” said Foreign Minister Nicolás Maduro, according to the Miami Herald. A close associate of Chávez accused the US of trying to be "the world's policeman as it steps on the sovereignty of the people."

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But for now, the almost 1 million barrels of oil a day that Venezuela sells to the US – 10 percent of US oil imports, more than 40 percent of Venezuela's oil exports – remain on track. Reuters reports that past threats to interrupt the US oil supply never materialized.

The sanctions, a response to Venezuela's continued assistance to Iran's energy industry, do not ban oil exports to the US and shouldn't affect the operations of the US branch of PDVSA. A decrease in supply to the US would be intentional, not a result of the sanctions.

The US is targeting PDVSA because it believes that Venezuela delivered $50 million worth of reformate, a "gasoline blending component," to Iran in the past year. The US hopes that the sanctions, which also target six oil and shipping in other countries, will cramp Iran's fuel supply. The Christian Science Monitor reports that although Iran has ample oil, its refinery capacity is inadequate and it imports 40 percent of its gasoline.

The newest round of sanctions mark the first attempt by the US to go beyond Iran in its attempts to halt its nuclear program, which it suspects of being geared toward nuclear weapon production. Past sanctions have targeted Iranian companies and banks.

The sanctions came a day after President Obama signed an executive order giving the State and Treasury Departments more leeway to target companies involved with Iran's energy industry, The Wall Street Journal reported. The new sanctions prevent PDVSA from competing for US government contracts, getting licenses for US exports, and receiving financing from the US Export-Import Bank.

The ramped-up sanctions were announced the same day that the International Atomic Energy Association said in a report that it believes that Iran continues to make progress with its nuclear program. While Iran claims its program is only for energy purposes, much of the world believes that Iran aims to produce nuclear weapons.

Iran was supposed to halt any weapon-oriented work in 2004, but the IAEA found evidence of such work as recently as 2010. On Wednesday, an Iranian official scoffed at the IAEA claims, calling them "repetitive and boring" and dismissing the allegations, Agence France-Presse reports.

The IAEA report also cited evidence that in 2003 that Iran was working on a nuclear trigger device, which would likely only be utilized in a nuclear weapon, The New York Times reported. The US estimates that Iran is at least a year, but more likely several years, away from being able to produce a nuclear bomb.

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