MercoPress. South Atlantic News Agency

Russian bank freezes Venezuela's oil company accounts, fearing US sanctions

PDVSA branded the story “fake news” on its Twitter account – in red capital letters, adding the caption

Russian lender Gazprombank has frozen the accounts of Venezuelan state oil company PDVSA and halted transactions with the firm to reduce the risk of the bank falling under US sanctions, according to Reuters.

While many foreign firms have been cutting their exposure to PDVSA since the sanctions were imposed, the fact that a lender closely aligned with the Russian state is following suit is significant, given that the Kremlin has been among Venezuelan President Nicolas Maduro's staunchest supporters.

“PDVSA's accounts are currently frozen. As you'll understand, operations cannot be carried out,” the source said.

PDVSA branded the story “fake news” on its Twitter account – in red capital letters, adding the caption: “Ill-intentioned information that purports to confuse the Venezuelan people” – but did not reply to Reuters' request for comment.

Reuters reported this month that PDVSA was telling customers to deposit oil sales proceeds in its Gazprombank accounts, according to sources and an internal document, in a move to try to sideline fresh US sanctions on PDVSA.

Washington says the sanctions, imposed on January 28, are aimed at blocking Maduro's access to the country's oil revenue, after opposition leader Juan Guaido proclaimed himself interim president and received widespread Western support.

Gazprombank is Russia's third biggest lender by assets and includes among its shareholders Russian state gas company Gazprom.

The bank has held PDVSA accounts for several years. In 2013, PDVSA said it signed a deal with Gazprombank for US$ 1 billion in financing for the Petrozamora company. The Gazprombank source confirmed that Petrozamora accounts were frozen, too.

Russian officials have said they stand by Maduro and have condemned opposition actions as a US-inspired ploy to usurp power in Caracas.

But Russian firms find themselves in a quandary, caught between a desire to endorse the Kremlin line and back Maduro, and the fear that by doing so they could expose themselves to secondary US sanctions which would harm their businesses.