LatinNews Daily - 25 May 2011

Development: On 24 May the Venezuelan foreign ministry rejected a US decision to impose sanctions on the state oil company Petróleos de Venezuela (Pdvsa) for its alleged dealings with Iran as an attack on national sovereignty by an imperial aggressor. Significance: The sanctions have little or no commercial effect and will not impact Venezuelan crude exports to its main customer, the US. Neither should they impact upon Pdvsa's ability to issue international bonds, which pay a handsome 16%. It's another rather clumsy political warning shot from the US government to Venezuela over its relationship with Iran that simply adds grist to President Hugo Chávez's mill. Meanwhile, right under the nose of the US, Argentina yesterday signed a deal with Russia for the potential Russian construction of a fourth atomic nuclear reactor in Argentina. Key points: • Deputy Secretary of State James Steinberg announced sanctions on seven foreign entities under the Iran Sanctions Act of 1996, as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, for their activities in support of Iran's energy sector. "All of these companies have engaged in activities related to the supply of refined petroleum products to Iran, including the direct supply of gasoline and related products", he stated. The state department accuses Venezuela of delivering gasoline additive to Iran in at least two cargoes between December 2010 and March 2011, which the Venezuelan government has previously denied.

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