December 13, 2017
Trump must stop Venezuela from sliding toward total dictatorship
The Trump administration’s sanctions on Venezuela have succeeded in creating a cash crunch in Caracas. But with Venezuelan President Nicolás Maduro getting close to defaulting on Venezuela’s $150 billion in foreign debt, the Trump administration needs to take steps to protect the United States from the fallout of a default while keeping up the economic pressure against Maduro’s increasingly autocratic government.
Venezuela’s dire fiscal situation represents a success of U.S. sanctions, which deny Maduro the ability to borrow from U.S. investors to prop up his government. But a Venezuelan default could also create unintended consequences for the United States. Venezuela’s state oil company, PDVSA, sells more than 500,000 barrels a day to U.S. refiners, and those sales could be disrupted if Venezuela’s creditors try to seize oil payments to satisfy Venezuela’s debts. In addition, Maduro could try to sell PDVSA’s single biggest asset in the United States, the oil refiner CITGO, as a way of raising cash. The risk to the United States is heightened by the fact that last year Venezuela pledged 49 percent of CITGO as collateral for a Russian loan, raising the specter that Russia could try to take ownership of a large stake in CITGO if Venezuela defaults.
Read the full commentary in The Hill.
More from CNAS
-
The Financing of WMD Proliferation
Reports
Executive Summary The proliferation of weapons of mass destruction is a critical threat facing the international community. Numerous United Nations Security Council Resolution...
By Jonathan Brewer
-
The Financing of WMD Proliferation
Reports
The proliferation of weapons of mass destruction is a critical threat facing the international community. Numerous United Nations Security Council Resolutions (UNSCRs) place b...
By Jonathan Brewer
-
How to Successfully Sanction North Korea
Commentary
The North Korean nuclear crisis has placed a premium on the ability of sanctions to avert war, and the past two years have seen an important increase in U.S. and international...
By Peter Harrell & Juan Zarate
-
The Missing Piece in the World’s North Korea Strategy
Commentary
Last Wednesday, the United States Treasury added to its economic pressure campaign against North Korea, sanctioning a variety of entities the Kim regime uses to evade internat...
By Neil Bhatiya
