PDVSA Gas sign/testing/Shutterstock.com

The U.S. government's decision to impose sweeping sanctions on Venezuela's state oil company appears to be, in essence, a ban on selling the country's crude to the U.S — and potentially across the world.

The Trump administration sanctioned Petroleos de Venezuela SA and the country's central bank on Monday, the latest move to raise pressure on President Nicolas Maduro after the U.S. recognized opposition leader Juan Guaido as interim president.

PDVSA becomes a Specially Designated National, meaning U.S. citizens are generally prohibited from dealing with it. Inclusion on this list is a powerful tool with the potential to curb trade in Venezuelan oil far beyond U.S. borders.

The last companies to be placed on the SDN list were linked to Russian billionaire Oleg Deripaska, including aluminum giant United Co. Rusal. That move roiled global metals markets last year as buyers and trading houses both in the U.S. and elsewhere stopped dealing with the company. The Treasury Department lifted sanctions on three firms with ties to Deripaska over the weekend.

“When a company is on the Treasury's SDN list, most international banks will cease dealings with them,” said Joe McMonigle, an energy policy analyst for Hedgeye Risk Management and a former senior official at the U.S. Energy Department. “So even though today's announcement applies to PDVSA's dealings with U.S. persons, the oil sanctions have much broader application.”

Some European oil traders have temporarily stopped dealing with PDVSA while their lawyers weigh whether it's possible for non-U.S. entities to continue buying Venezuelan petroleum without breaking sanctions, according to people familiar with the matter, who asked not to be named discussing internal matters.

“Other Western countries are also likely to join in the sanctions,” said Olivier Jakob, managing director at consultant Petromatrix GmbH. “China and India might continue to buy crude oil from Venezuela, but in our opinion the country is about to turn into another Libya as it will be harder and harder to operate the oil facilities.”

The new sanctions means that the U.S. is simultaneously targeting the economic lifeline of two members of the Organization of Petroleum Exporting Countries — Venezuela and Iran — something the oil market hasn't seen for more than a decade. At times, the U.S. has also imposed sanctions on Iraq and Libya.

U.S. National Security Adviser John Bolton told reporters on Monday that the move would reduce Venezuelan export revenue by $11 billion over the next year. It wasn't clear if he was referring only to the direct impact of restrictions on U.S. imports.

Venezuela's production has plunged in recent years as its oil industry collapsed in tandem with the country's broader economy. Still, it remains one of the three biggest suppliers of crude to the U.S., behind Canada and Saudi Arabia. The Latin American nation shipped an average of 584,000 barrels a day to American refiners in the past four weeks, about 8 percent of total U.S. crude imports.

Any reduction in American purchases could potentially offer China and India, the second- and third-largest buyers, a feast of cheaper crude that's unwanted elsewhere.

The U.S. has sanctioned many individuals at PDVSA previously, but hitting the entire company effectively prevents U.S. refiners from buying Venezuelan crude, after a wind-down period to March 29.

The second-biggest U.S. importer of Venezuelan crude, Valero Energy Corp., said it would “re-optimize” its supply to minimize the impact of the sanctions. “Valero will continue to support the administration and will provide officials with relevant information that will help the U.S. refining system to function efficiently and effectively” a spokeswoman said Monday.

U.S. refiners who find alternative supplies may have to pay higher prices. The kind of crude that Venezuela exports, known as heavy-sour, is currently scarce due to voluntary cuts in OPEC and Canadian output and the impact of American sanctions on Iran.

“I don't know there will be a lot of options out there,” said McMonigle. “Obviously, Canadian crude is one but they have cut back on their production. Also, Saudi heavy crude is another option, but of course the Saudis are now planning further cuts.”

Citgo Petroleum, a Houston-based refining and marketing unit of PDVSA, will be able to continue to operate but won't be allowed to remit money to the Maduro regime. Its proceeds must instead be held in blocked U.S. accounts, the Treasury said.

There's also a prohibition on exporting light oil to Venezuela needed to dilute its heavy crude, further hindering the country's ability to export.

These measure are an attempt to shift control of crude revenues to opposition leader Guaido, Jim Lucier, managing director of Washington, D.C.-based Capital Alpha Partners LLC, said by email. “The Trump administration is trying to figure out how to make a bank of Guaido work.”

Tina Davis and Javier Blas report for Bloomberg News.