June 5, 2020 / 5:43 PM / a month ago

EXCLUSIVE-U.S. considers blacklisting more oil tankers over Venezuela trade, official says

(Adds confirmation from U.S. official)

By Jonathan Saul, Devika Krishna Kumar and Matt Spetalnick

LONDON/NEW YORK/WASHINGTON, June 5 (Reuters) - The United States is considering imposing sanctions on dozens of additional foreign oil tankers for trading with Venezuela, a U.S. official told Reuters on Friday.

Some of the sanctions announcements could come in the near-term while others could be imposed over a longer period if the activities persisted, the official said on condition of anonymity.

Earlier on Friday, four shipping sources told Reuters that potential sanctions on at least 40 various ships could be imposed soon, although the Trump administration had not yet finalized a decision to act.

If taken, the move could disrupt global seaborne trade by sharply raising tanker rates.

The vessels that could be targeted included 25 supertankers, which can each carry a maximum of 2 million barrels of oil, and 17 smaller vessels, the sources said.

There was no immediate comment from the U.S. Treasury Department. The White House and U.S. State Department did not immediately respond to requests for comment.

“Flag registries, shipping companies and their associated suppliers/vendors be warned: Illegal transactions with the illegitimate regime of Venezuela’s Nicolas Maduro may subject you to crippling financial and economic sanctions,” the White House’s National Security Council warned in a tweet on Tuesday.

The United States and dozens of other nations regard Maduro and his socialist government as illegitimate because of a 2018 election that was widely seen as fraudulent. Maduro has accused Washington of orchestrating a coup to remove him from power in order to gain control of the South American nation’s oil reserves.

PRESSURE ON MADURO

U.S. officials have steadily added tankers and shipping companies to the blacklist over their dealings with Venezuela since Washington imposed sanctions last year, and have warned that more will be targeted if they fail to abide by sanctions.

Some U.S. officials have said privately that President Donald Trump has become frustrated by the failure to oust Maduro, who retains the support of the Venezuelan military as well as Russia, China, Cuba and Iran.

Earlier this week the U.S. Treasury said it had imposed sanctions on four shipping firms for transporting Venezuelan oil, the latest escalation in Washington’s effort to force Maduro from power by cutting off the OPEC nation’s crude exports.

Washington imposed sanctions on Venezuelan state-run oil company Petroleos de Venezuela in early 2019. Maduro blames the sanctions for a deep economic crisis in Venezuela that has led to shortages of basic goods.

Further tanker sanctions could have an even bigger impact than when the Trump administration blacklisted two units of Chinese tanker company COSCO late last year, market sources said. That decision caused freight rates to hit record highs, market sources said.

Earlier this year, the U.S. lifted sanctions on one of two COSCO units.

“Targeting tankers through more sanctions is an easier way of avoiding direct confrontation (over Venezuela). If more ships are sanctioned it will filter through into rates,” one source said.

Tanker rates were already up on Friday on the main Middle East to Asia benchmark route, Baltic Exchange data showed.

A Chevron Corp crude cargo has become embroiled in U.S. sanctions on shipping companies for violating restrictions on doing business with Venezuela, the company confirmed on Friday.

“There is concern that other ships/owners may be at risk for similar sanctions,” shipbroker Clarksons Platou Securities said this week after the earlier designations. (Reporting by Jonathan Saul in London and Devika Krishna Kumar in New York, additional reporting by Timothy Gardner and Matt Spetalnick in Washington Editing by Paul Simao)

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