(CN) – The Trump administration on Monday ratcheted up its efforts to oust embattled Venezuelan President Nicolás Maduro, leveling sanctions against the state-owned oil company aimed at cutting off $11 billion in annual oil export revenue for Maduro’s government.
Experts say the move will financially cripple Maduro’s government, which depends on revenue from the 500,000 barrels of crude oil that Petróleos de Venezuela, S.A., or PDVSA, ships to the United States each day.
Treasury Secretary Steve Mnuchin said Monday at a White House press conference that PDVSA is a “vehicle for embezzlement” for Venezuelan officials and politically connected businessmen.
He said the sanctions are a bid to help Venezuelans “restore their democracy” under 35-year-old National Assembly leader Juan Guaidó.
Guaidó declared himself interim president last week, and the U.S. and 20 other countries have recognized him as Venezuela’s president. They claim Maduro won re-election in May 2018 to another six-year term through a rigged vote count.
Maduro is a 55-year-old former bus driver who became president in 2013 after the death of his mentor, socialist Hugo Chavez.
Venezuelans have struggled with food and medicine scarcities for the past few years, as the economy has collapsed and inflation has soared under Maduro’s socialist government, with residents hard pressed to find such basic products as toilet paper on store shelves.
Three million Venezuelans have left the country in recent years, 1 million of them to neighboring Columbia.
The 500,000 barrels of oil the U.S. imports from Venezuela each day is about 3 percent of American demand, and experts say the measures will affect U.S. Gulf Coast refineries, which receive the bulk of Venezuelan oil and blend it with lighter crude oil from West Texas.
PDVSA is the majority owner of Houston-based Citgo Petroleum Corp. which led U.S. refiners, importing more than 56 million barrels of Venezuelan oil last year, the Houston Chronicle reported, citing Energy Department data.
Mnuchin said Citgo, owner of three U.S. refineries, can continue operating under the sanctions and put any money meant for PDVSA in a restricted bank account.
He said PDVSA can get the sanctions lifted by recognizing Guaidó as president.
Maduro condemned the sanctions Monday at a diplomatic ceremony in Venezuela’s capital Caracas.
“With this measure they’re setting out to steal the Citgo company from all Venezuelans. No, Donald Trump. No, no, no,” he said, according to the New York Times.
Venezuela also supplies large amounts of crude to its allies Russia and China to pay off debt. Those countries do not pay cash for the oil like U.S. refiners do, so the sanctions cut off a vital lifeline of U.S. oil revenue for Maduro’s government, according to oil market analysts.
U.S. Senator Marco Rubio, a Florida Republican, said in a statement Monday that Maduro has used PDSVA revenue to corrupt Venezuela’s military leaders, and that the funds could be released to a new government if there are safeguards in place to stop Maduro from accessing them.
“The Maduro crime family has used PDVSA to buy and keep the support of many military leaders. The oil belongs to the Venezuelan people, and therefore the money PDVSA earns from its export will now be returned to the people through their legitimate constitutional government,” Rubio said.
National Security adviser John Bolton is sticking to his hard-line stance against Maduro, warning that if he refuses to step down military intervention is an option.
“The president has made it very clear on this matter that all options are on the table,” he told reporters Monday.
U.S. Representative Michael McCaul of Texas, the senior GOP member of the House Foreign Affairs Committee, urged Venezuelan military officials to back Guaidó.
“The Venezuelan military should stand with the people and help facilitate a peaceful transition of power. It’s time for the socialist nightmare of Nicolás Maduro to come to an end,” he said in a statement Monday.
The Associated Press reported that Russia expects Venezuela to have problems repaying debt owed to the Kremlin because of the U.S. sanctions. A spokesman for the Russian government said it shares Venezuela’s view that the measures are “illegal.”
Venezuelan security forces detained nearly 700 people last Wednesday alone, according to the U.N. human rights office, marking the highest number of arrests in a single day in the country in at least two decades.