U.S. sanctions have driven Venezuela’s oil exports to their lowest levels in nearly 80 years, starving President Nicolas Maduro’s socialist government of its main source of revenue and leaving authorities short of cash for essential imports such as food and medicine.
The sanctions are part of U.S. efforts to weaken Maduro’s grip on power after Washington and other Western democracies accused him of rigging a 2018 re-election vote. Despite the country’s economic collapse, Maduro has held on and frustrated the administration of U.S. President Donald Trump.
Maduro’s government says the United States is trying to seize Venezuela’s oil and calls the U.S. measures illegal persecution that heap suffering on the Venezuelan people.
Washington has honed in on the maritime industry in recent months in efforts to better enforce sanctions on the oil trade and isolate Caracas, Washington’s special envoy on Venezuela Elliott Abrams told Reuters.
“What you will see is most shipowners and insurance and captains are simply going to turn away from Venezuela,” Abrams told Reuters in an interview.
“It’s just not worth the hassle or the risk for them.”
The United States is pressuring shipping companies, insurers, certifiers and flag states that register vessels, he said.
Ship classification societies, which certify safety and environmental standards for vessels, are feeling the heat for the first time.
The United States is pressuring classifiers to establish whether vessels have violated sanctions regulations and to withdraw certification if so as a way to tighten sanctions further, a U.S. official told Reuters, speaking on condition of anonymity.
Without certification, a vessel and its cargo become uninsured. Ship owners would also be in breach of commercial contracts which require certificates to be maintained. In addition, port authorities can refuse entry or detain a ship.
London-headquartered Lloyd’s Register (LR), one of the world’s leading ship classifiers, said it had withdrawn services from eight tankers that were involved in trade with Venezuela.