CARACAS, Venezuela – President Hugo Chavez's government condemned U.S. sanctions imposed on Venezuela's state oil company for doing business with Iran, saying it is evaluating how fuel shipments might be affected.
Industry analysts, however, said the sanctions announced Tuesday probably won't significantly cut into the business of Petroleos de Venezuela SA because Washington is not preventing PDVSA from selling crude to the United States or through Citgo, its U.S. subsidiary. Venezuela is one of the United States' main suppliers of petroleum.
"The sanctions would have only modest real impact on today's undertakings by PDVSA," said Gustavo Coronel, an energy consultant and former PDVSA executive. "The real significance has to be found in the psychological, political effect of the measure."
"It constitutes the first real move of the Obama government against Chavez's Venezuela," Coronel said.
President Barack Obama's administration slapped sanctions on PDVSA and six other foreign companies for doing business with Iran. The State Department said PDVSA delivered at least two cargoes of refined petroleum products worth about $50 million to Iran between December and March.
Venezuela's government strongly condemned the sanctions, saying in a statement that it is studying to what extent "these sanctions affect the operations of our national oil industry, and the supply of 1.2 million barrels a day to the United States."
Venezuelan Foreign Minister Nicolas Maduro read the statement at a news conference, adding that "Venezuela reserves the most proper response to this imperialist aggression."
The U.S. is the main buyer of oil from Venezuela, where Chavez's leftist-oriented government relies heavily on PDVSA's annual revenues of about $4 billion to fund its social programs for the country's poor.
Maduro told reporters Venezuela was considering the possibility of denouncing the sanctions before international organizations such as the United Nations. He said that the government's relationship with Iran is purely peaceful and that Venezuela intends to continue strengthening ties with the Iranian government.
Energy Minister Rafael Ramirez said shipments of heavy crude to PDVSA's U.S.-based subsidiaries will continue, but the company cannot guarantee shipments to nonaffiliated private oil companies. He said the details of the U.S. sanctions are vague.
He said the government was still analyzing the potential impact of the sanctions on Venezuela's oil industry. "We are going to evaluate exactly how these actions affect our production and sales capacity," he said.
Ramirez sidestepped a question seeking confirmation that Venezuela shipped oil to Iran.
Under the sanctions, PDVSA will be barred from any U.S. government contracts, U.S. import-export financing and export licenses for sensitive technology. But it will not be banned from selling oil to the United States or its dealings with its U.S. subsidiaries are not affected.
Venezuela does not fear the possibility of more severe U.S. sanctions in the future, and PDVSA is ready to confront the effects of the sanctions, Ramirez said.
"We're not scared of anything," he said.
U.S. Rep. Connie Mack, a Florida Republican who pushed for the sanctions, said he thinks they are "not going to have an immediate, drastic effect" on Venezuela's petroleum industry or weaken Chavez's government.
But he said in a telephone interview that the State Department's decision to apply sanctions is "a step in the right direction."
Jorge Pinon, a visiting research fellow at Florida International University's Latin American and Caribbean Center, said the U.S. government probably did not apply more strict sanctions against Venezuela or measures that would halt Venezuelan oil exports to the United States because such a move would further boost gasoline prices.
"This is a very difficult balancing act for the U.S. because in the short term they need the oil supply from Venezuela," Pinon said. "Supply to the U.S. is crucial."
The United States remains the top buyer of Venezuelan oil despite political tensions between Chavez and officials in Washington.
Under Chavez, PDVSA has sought to diversify its clientele, exporting more to China and other countries.
During a debate in Venezuela's National Assembly after the sanctions were announced, opposition lawmaker Julio Montoya scoffed at suggestions by ruling party lawmakers that Venezuela could potentially ship its heavy crude to allied countries rather than the United States.
"Venezuela depends more than ever on the United States," Montoya said.
He accused Chavez and his political allies of failing to live up to their ideals by periodically threatening to cut off oil exports to the U.S. yet not significantly reducing Venezuela's dependence on the U.S. market.
Chavez responded on Twitter, calling the sanctions a "new aggression" imposed by "the imperialist gringo government." He said it would serve only to strengthen Venezuela's resolve.