The United States on Monday imposed sanctions on Venezuela’s state-owned oil firm, Petroleos de Venezuela SA. PdVSA is the parent company of the US-based Citgo oil firm, CNN reported.

US Treasury Secretary Steven Mnuchin and National Security Advisor John Bolton announced the sanctions from the White House briefing room. Bolton said the sanctions will block about $7 billion in assets, and result in over $11 billion in lost assets over the next year.

Mnuchin described PdVSA as a “vehicle for embezzlement and corruption for Venezuelan officials and businessmen”. “The United States is holding accountable those responsible for Venezuela’s tragic decline,” he said. “Today’s designation of PdVSA will help prevent further diversion of Venezuela’s assets by [President Nicolas] Maduro, and will preserve these assets for the people of Venezuela where they belong.”

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Mnuchin said the sanctions will be effective immediately.

On January 23, Maduro cut diplomatic ties with the United States and gave American diplomatic personnel 72 hours to leave the country, after the Donald Trump administration recognised Opposition leader Juan Guaido’s claims to the presidency. However, on Sunday, Maduro’s government reversed the order for US diplomats to leave Venezuela.

Guaido is the leader of the Opposition-led National Assembly, a body Maduro does not recognise. The US has backed Guaido, who declared himself president last week.

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Maduro reacted to US sanctions by claiming that he will retaliate against the country. “I have given specific instructions to the head of PDVSA to launch political and legal action, in US and international courts, to defend the property and assets of Citgo,” he said on state-owned television according to AFP.

The president, addressing the audience at a ceremony in Caracas to welcome home diplomats recalled from the United States, claimed that America was trying to “steal Citgo from us”. “Be on alert, Venezuela!,” he added.