Today, the Trump administration hit Venezuela with a very targeted series of sanctions designed to bring about a massive default by Venezuela on it outstanding bonds next quarter and to prevent Venezuela’s elite from being able to live well while the people starve.*

Trump signed an executive order barring dealings in new bonds and stocks issued by the government and the state oil company, Petróleos de Venezuela, the parent of Citgo. Banks also cannot engage in new lending with the government or the oil giant.

“Maduro chose to embrace dictatorship over his own people,” national security adviser H.R. McMaster said. “With today’s announcement, the president is keeping his promise of strong action and continuing to show strong leadership.”

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“Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people,” Mnuchin said. “Today’s actions is the next step towards freedom for the Venezuelan people.”

The penalties come on top of U.S. sanctions on Maduro and senior government officials announced last month. They are the first to directly target Maduro’s access to prime sources of funding.

In essence, what this does is shut down the two primary sources of external capital available to Venezuela: sales of government bonds and sales of bonds by the state owned petroleum company. By drying up inflows of capital, the administration hopes to force a financial crisis and the removal of the Maduro regime. Hope is not a method but right now hope is the best thing we have going in regards to Venezuela.

The left was quick to leap on the fact that Citgo is not covered by sanctions. The is how The Daily Beast covers it Trump Saves Citgo, Repped by His Ex-Aides, From New Sanctions.

The White House on Friday announced a new round of sanctions against Venezuela that explicitly exempt the U.S. arm of the country’s state-owned oil company. That company, Citgo, donated six-figure sums to Trump’s inauguration and recently hired former Trump officials to lobby for that exemption.

And, the climate being what it is, the reporter here goes on to detail the lobbyists hired by Citgo and throws some Russia into the mix just because he can.

The exemption Citgo received from the Trump administration in this latest round of sanctions won’t just benefit PDVSA, it will also benefit a Russian company that has been fighting U.S. sanctions on a wholly separate front. Months before the Trump inauguration PDVSA mortgaged 49.9% of Citgo to state-owned Russian energy giant Rosneft as collateral for a $1.5 billion loan to the Venezuelan parent company. Rosneft paid another $1 billion this month for crude oil from the cash-strapped PDVSA, which is the Russian firm’s largest non-Russian supplier.

The U.S. sanctioned Rosneft and its chief executive, Putin ally Igor Sechin, in 2014 in retaliation for the Russian invasion of Ukraine and annexation of Crimea. Top Russian officials have made no secret of their desire to relax those sanctions as well.

This line of argumentation is deceptive, and as has become the trademark of the anti-Trump movement, left and right, basically dishonest. As strange as it may seem, the New York Times answers a lot of questions:

The administration stopped short of prohibiting imports of Venezuelan crude oil to American refineries, which would almost certainly be a crippling step. American refiners have lobbied hard against sanctions against oil imports, arguing that they would raise fuel prices, slash profit margins and potentially cost oil company jobs along the Gulf Coast.

The embargo against Venezuela is not a boycott and it isn’t an oil embargo. It is a tightly calibrated measure to ratchet up economic pressure, it is not supposed to create immediate economic collapse and heads on pikes in Caracas. An embargo on Venezuelan crude, which is the #3 source of all American oil imports, would slam the economy of the Gulf Coast.

The new sanctions have broad loopholes, allowing for the financing of most commercial trade, including the export of American light crude oil to Venezuela for mixing with its heavy crude, and financing for humanitarian services to the Venezuelan people.

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Financing of import and export transactions of Pdvsa’s American affiliate, Citgo, which has several refineries in the Gulf of Mexico along with a network of pipelines and gasoline stations, will also be exempted from the new sanctions. However, even while Citgo can still sell debt, it cannot directly send profits back to the Venezuelan government.

As the story says, not only is Citgo not directly sanctioned, but US companies are allowed to export oil to Venezuela to be mixed with Venezuelan crude and reimported to the United States for processing.

Because Citgo is a US company, registered in Delaware, it seems unlikely that Treasury would be able to impose sanctions on Citgo, even if it wanted to. It could sanction individual Venezuelans associated with the company but to actually strike at Citgo would require some sort of action involving courts and lawyers and due process.

*Let me say here, that to a great extent what the people of Venezuela are experiencing is a self-inflicted bazooka wound to the foot. They kept Hugo Chavez and this lip-merkin-wearing stooge Maduro in power because they were destroying the nation’s wealth and using that wealth to buy political loyalty. While I have little to no sympathy for the vast majority Venezuelans who went along with this nonsense, neither to I want them to suffer more than they already have because, in the end, they will do the same thing again because, as we know, pure socialism has never been tried.