Venezuelan oil company sanctioned for violating Iran embargo

The Miami HeraldMay 25, 2011 

Venezuela’s state-run oil company was slapped with sanctions on Tuesday for allegedly supporting Iran’s nuclear ambitions, in a move that appeared designed to protect U.S. consumers while throwing a wrench into the company’s global finances.

The U.S. Department of State’s measure comes as Venezuela increasingly embraces Iran – even as the international community has moved to isolate the Persian nation.

The U.S. government said Petroleos de Venezuela S.A., or PDVSA, ran afoul of the Iran Sanctions Act of 1996 when it shipped some $50 million worth of a fuel additive to Iran between December and March.

The penalty: PDVSA is prohibited from competing for U.S. government contracts, obtaining U.S. export licenses, and from getting financing from the Export-Import Bank of the United States, which provides credit to exporters.

But the sanctions do not apply to PDVSA’s subsidiaries and do not bar Venezuela from exporting crude to the United States. The oil giant sells fuel under the CITGO brand, and Venezuela is the United States’ fifth-largest oil exporter.

Those caveats should help stave off higher gas prices.

Even so, Tuesday’s sanctions could seriously stymie operations in one of Venezuela’s key industries, said Juan Fernández, who worked at PDVSA for 18 years and was the company’s general manager for financial planning and global business.

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