Venezuela President Nicholas Maduro delayed the convening of the new Constituent Assembly one day from Thursday to Friday amid charges that the last Sunday’s election results were rigged.
The US Treasury Department on Monday called the new assembly “illegitimate” and imposed sanctions on Venezuela President Nicholas Maduro that will freeze his personal assets and ban any dealings between him and US citizens.
We believe the sanctions on Maduro and possibly other individuals in the Venezuela government are just the beginning of US actions against the regime, and investors should still expect further steps - including energy sanctions.
Our view is that energy sanctions on Venezuela crude exports to the US remain under active consideration, and there is strong support within the national security council staff for such action.
One indication that there is more yet to come was a statement this week from Senator Marco Rubio (R- Florida) who applauded the Maduro sanctions but added he remains “confident the president will keep his clear commitment to impose economic sanctions on the regime if they convene the illegitimate Constituent Assembly.”
We believe Rubio has revealed the catalyst for energy sanctions: the convening of the Constituent Assembly. The exact timing is a little unclear but according to news reports, the newly elected members of the Constituent Assembly will be sworn in on August 4, and the assembly convened 72 hours later. As a result, we may see further US announcements on sanctions Friday or early next week.
Rubio is an important player because he is a strong proponent of energy sanctions as a way to oust Maduro, and he is also close to the NSC staff who prepared the policy option. Rubio and others in the Cuban community in Florida see Cuba’s influence behind the Venezuela government’s violent crackdown on opposition and protests and are pushing for tough US action on Castro-pal Maduro.
The Maduro sanctions are only the start, not the end.