Tanker Seizure Just the Start as Trump Ups Pressure on Venezuela

The seizure of an enormous oil supertanker off the coast of Venezuela on Wednesday is just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against Nicolas Maduro, according to people familiar with the operation.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — The seizure of an enormous oil supertanker off the coast of Venezuela on Wednesday is just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against Nicolas Maduro, according to people familiar with the operation. Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.The act of economic statecraft — which saw US forces descend on ropes from a Black Hawk helicopter onto the deck of a sanctioned very-large crude carrier called Skipper — is designed to deny Maduro a lifeline of oil revenue and force him to relinquish power, the people said. “We’re not going to stand by and watch sanctioned vessels sail the seas with black-market oil — the proceeds of which will fuel narco-terrorism of rogue and illegitimate regimes around the world,” White House Press Secretary Karoline Leavitt told reporters on Thursday.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.The US already was following up on the tanker seizure a day earlier with the Treasury Department sanctioning six crude oil tankers and four of Maduro’s so-called “narco-nephews.” Maduro’s inner circle is frantically looking for ways to adapt to a scenario where the US could seize other sanctioned ships, according to people familiar with the matter. In particular, the people said, leaders at the state oil company Petroleos de Venezuela SA are trying to determine how they can safely export oil to China, which buys the vast majority of Venezuelan oil through intermediaries.Venezuela gets about 80% of its export revenues from oil, but that figure likely understates its importance in terms of Venezuela’s relationship with Cuba. “This is a way of turning up the volume and the amount of tension and pressure placed on the regime,” said Juan Cruz, who served as senior director for Western Hemisphere affairs at the White House’s National Security Council during Trump’s first term. “This is just one more measure to make their world smaller, and to squeeze them tighter.”The seizure spooked oil markets and comes after President Donald Trump ordered a massive US military build-up in the region that has raised fears of outright conflict following strikes on alleged drug trafficking boats. It provided a glimpse at the additional methods available to Trump and Secretary of State Marco Rubio as they seek measures — short of war — to force the Venezuelan strongman from office. Trump said this week that Maduro’s “days are numbered.” And while the president confirmed the tanker seizure on Wednesday, he stressed “other things are happening” — a likely allusion to the fact that military moves, including land strikes that he’s suggested recently, are still a possibility. While the US has attacked alleged drug boats for months — killing more than 80 people in a legally-questionable military campaign — polls suggest a full-on war would be politically unpopular in the US. However, the Trump administration argues that ending Maduro’s reign will kick-start a chain reaction in the region that would address key priorities such as the drug cartel-fueled opioid crisis in America’s heartland and illegal migration from Latin America.Rubio has accused Maduro of stealing elections and ties to drug cartels, but also of fostering broader instability in the Western Hemisphere, including through Venezuela’s alliance with Iran and allowing the Tehran-backed militant group Hezbollah to operate from its territory. The strongman has also presided over an economic crisis that’s sparked an exodus of roughly eight million Venezuelans, pressuring other South American countries as well as the US.Officials have made the case that change in government in Venezuela, which is larger than France and Germany combined, could have a transformative impact across Latin America, while other governments in the region trend to the right. Rubio has expressed hope that Colombia will vote next year to elect a candidate who reverses many policies of leftist president Gustavo Petro, who clashes frequently with the US. Bolivia also has just elected a conservative leader for the first time in decades, and Chile looks poised to elect a conservative this weekend.Rubio, the Miami-born son of Cuban immigrants who is now also Trump’s acting national security advisor, also wants to end Venezuela’s economic patronage of the Communist regime in Cuba, which has long relied on cheap oil from Venezuela amid the long-running US trade embargo. The US had concluded the tanker seized this week was bound for Cuba, two people familiar with the matter said, though it would be unusual for a boat of that size to travel from Venezuela to Cuba based on historical shipping patterns. “This may be part of a larger strategy aimed at severing the relationship between Havana and Caracas,” said Geoff Ramsey, a Venezuela researcher and senior fellow at the Atlantic Council. “Without the Cuban intelligence and logistical support, it’s doubtful that Maduro would be where he is today. Washington is increasingly looking to try to drive a wedge between Cuba and Venezuela.”US officials have long suspected Maduro’s regime of selling sanctioned crude via Cuba illegally in order to benefit from the profits with less traceability. Just a single supertanker like the one seized Wednesday can carry around two million barrels of oil, or around $115 million at current prices, although Venezuelan oil is sold at steep discounts owing to sanctions risk.While it might not be possible for them to seize every tanker, the US may only need to do a market-shaking enforcement once or a handful of times in order to spike insurance costs to levels that make it too onerous to profit from moving Venezuelan oil. The US move this week could steeply raise insurance premiums for shippers and deter the crucial shadow fleet of sanctioned vessels that helps move about 30% of Venezuela’s oil exports, the consultancy Rapidan Energy Group wrote in a note to clients on Wednesday.“The Trump administration means business and it now appears very little will be arriving or departing Venezuela by sea without US sign-off,” said Kimberly Breier, assistant secretary of state for Western Hemisphere Affairs during Trump’s first term. “The escalation is meaningful, a logical next step in a sanctions campaign and one that will deprive Maduro and his regime of the funds it needs to stay in power.”—With assistance from Hadriana Lowenkron and Patricia Garip.Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. 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