U.S. Extends Citgo’s Protection Amid Ongoing Venezuelan Crisis

The U.S. Treasury Department has extended a license protecting Citgo from creditors until early July, following the halt of Chevron’s operations in Venezuela. This move prioritizes the safeguarding of the Venezuelan-owned oil refiner as legal proceedings progress. Maduro’s administration accuses the U.S. of attempting to seize Citgo, complicating relations due to ongoing sanctions and opposition pressures.

The U.S. Treasury Department has announced an extension of the protective license for Citgo Petroleum, a refiner owned by Venezuela, effective until early July. This decision comes in light of the previous administration’s termination of a crucial license that permitted Chevron to operate within Venezuela. The protection is vital as Venezuela’s opposition leaders advocate for Citgo’s safeguarding, especially amid ongoing legal proceedings regarding the auction of its parent company’s shares to satisfy creditors.

Additionally, the Office of Foreign Assets Control must approve any new shareholders post-auction, who would subsequently manage Citgo’s operations. Venezuelan opposition figures have also urged the U.S. to eliminate any financial support for President Nicolas Maduro, whose re-elections remain unrecognized by Washington. This advocacy contributed to the U.S. revoking an authorization previously permitting Chevron to export Venezuelan crude oil since 2022.

The renewed license, replacing an earlier authorization from November, delays all transactions associated with a bond maturing in 2020, issued by Citgo’s parent company, PDVSA, based in Caracas, until July 3. PDVSA has defaulted on this bond along with others, inciting numerous holders to pursue compensation in the United States and to target Citgo and its affiliates located in the U.S.

Accusations have surfaced from Maduro’s government, claiming that the U.S. is attempting to unlawfully seize Citgo. Since Maduro’s contested re-elections in 2018, the U.S. has imposed sanctions against Venezuela’s oil sector, significantly impacting the country’s economy over the past six years.

The U.S. Treasury has prolonged Citgo’s protective license amid Venezuela’s ongoing economic challenges and political strife. This decision is crucial for maintaining the refiner’s operations while ensuring that any future ownership changes undergo proper scrutiny. Simultaneously, the Venezuelan opposition continues to advocate for the safeguarding of national assets, a matter that remains contentious given the U.S. sanctions against the Maduro administration, further complicating the geopolitical landscape.

Original Source: www.tradingview.com