China and India could both emerge as unlikely winners from possible U.S. sanctions on Venezuela’s vital oil sector, according to one oil analyst.
President Donald Trump vowed to take “strong and swift economic” action ahead of Venezuela’s controversial election for a new Constituent Assembly on Sunday. President Nicolas Maduro won the contentious vote, while the opposition party – and several of the crisis-stricken nation’s neighbors – refused to recognize the result.
Stephen Brennock, oil analyst at PVM Oil Associates, told CNBC on Monday that the ramifications of sanctions imposed on Venezuela’s oil sector could be far reaching.
“Venezuela would lose out on much needed oil revenues, U.S. refiners would be negatively impacted by a drop in refining margins and U.S. motorists by an increases in gasoline prices.
“However, there is one potential silver lining… Other major crude-importing nations such as India and China may stand to gain if they are offered Venezuelan crude at steep discounts,” Brennock explained via email.