US Prepares for Battle Over Venezuelan Oil Refiner Citgo

PDVSA demands prepayment for all US-bound oil

Following Monday’s imposition of sanctions against Venezuela’s oil industry, the Trump Adminsitration is gearing up for what could be a protracted international battle over the legal control of Venezuela’s main overseas assets, the most substantial of which is Citgo.

Citgo is Venezuela’s US-based refinery business, which owns three refineries in the United States and a major chain of gas stations across the country. They are where much of Venezuela’s overseas oil exports end up.

Venezuela’s state oil company PDVSA owns the majority of Citgo, while 49% of it is owned by Russia’s Rosneft as collateral for loans. PDVSA is ordering all US-bound oil tankers to pre-pay for their oil now, as the US sanctions would effectively prevent them from getting paid. The sanctions require all payments to be put in a frozen account that PDVSA cannot access.

Venezuela’s Oil Minister says the country is examining imposing force majeure to get out of certain contracts which are no longer tenable amid the US sanctions. Force majeure would allow them to back off contracts on the grounds of forces outside of their control.

Author: Jason Ditz

Jason Ditz is Senior Editor for Antiwar.com. He has 20 years of experience in foreign policy research and his work has appeared in The American Conservative, Responsible Statecraft, Forbes, Toronto Star, Minneapolis Star-Tribune, Providence Journal, Washington Times, and the Detroit Free Press.