The U.S. Treasury Department sanctioned Venezuelan Oil Minister Manuel Quevedo, who also serves as the head of its state-owned oil giant, PDVSA, and four other officials for their ties to President Nicolas Maduro.
I always find Reuters to be a good way to keep up with specific power brokers so I also did a specific search on that news source and just found this announcement from Quevedo:
Venezuela will stick to its plan of blending domestic and foreign crude to maintain and even increase oil production and exports in the face of sanctions prohibiting U.S. companies from buying the country’s oil, oil minister Manuel Quevedo said on Tuesday.
If I understand this correctly, U.S. companies used to buy Venezuela oil and then blend it. Now Venezuela needs to import oil and do the blending internally.
The article briefly mentions that oil output dropped to 400,000 bpd in March, but this was temporary. A Forbes article puts production at 700,000 bpd.
Since there wasn't much out there on Quevedo (other than perhaps general business decisions being made by PDVSA), I decided to look at Venezuela's oil and military situation.
OilPrice had an article up on how U.S. sanctions might impact Venezuela's oil industry:
A U.S. sanction waiver expiry later this year could see the number of drilling rigs in Venezuela’s Orinoco Belt slashed by half, putting additional pressure on Caracas by further reducing already low oil production rates.
“Almost half the rigs are being run by the Yanks, and if the window shuts down on this in two months, then that’s really going to hurt Venezuela unless the Russians and the Chinese come in,” an analyst with consultancy Caracas Capital Markets told Bloomberg.
I wrote back in late June that it looked like President Trump had lost interest in Venezuela, which I guess wasn't correct. The article states that this sanction waiver only extends to October. As Forbes mentions, this most likely means that the U.S. government is giving a strong hint to US oil producers that they should plan on shutting down their Venezuela operations. Yet, as OilPrice states, there's a strong possibility that the Chinese and Russians will just fill the gap. Of course, these transitions won't happen over-night so I suspect that Venezuela's oil production will take a strong dip for a few months.
It is, of course, speculation that the Chinese and Russians would come in to replace US oil producers, but I think it is a strong possibility. Venezuela looks to be a place where the Chinese and Russians don't want to give the Trump administration a victory.
Maduro has given the military a slice of the economic pie. Quevedo being a good example. This was an attempt to buy loyalty. It probably has worked; however, the New York Times writes about many coup attempts by the military. Here's a key statement on why these coup attempt probably haven't succeeded yet:
While Mr. Maduro has sought to ensure the loyalty of the military’s top brass with promotions and lucrative contracts, middle- and lower-ranking officers and their families are increasingly affected by the crisis. That makes them restless.
Yep, the military leadership is likely to stick with Maduro and the coup attempts are being attempted by lower-ranking officers. The article states that there have been at least five attempts to overthrow or assassinate Maduro. The government claims a dozen more.
Below is another quote about how extensive the dissent within the military is:
There are now 217 active and retired officers being held in Venezuelan jails, including 12 generals, according to the Coalition for Human Rights and Democracy, a Caracas-based nonprofit that represents several of the men.
Of course, one has to wonder how many of those individuals in jail (if all are really guilty of attempting or plotting a coup) were encouraged recently by the US government?
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