“They’ve borrowed against it up to the hilt. It’s like having three mortgages on your home,” said Russ Dallen, managing partner of Caracas Capital, an investment bank.
Payments to Rosneft on its secured collateral will be due in March, putting more pressure on Citgo’s finances.
“There are a lot of moving parts,” Dallen said.
Guaidó’, supported by some 20 nations in addition to the United States that recognize him as the head of state, could seek a resolution from the Organization of American States for a type of “debt shield” like the U.N. resolution that allowed Iraq to rebuild after the 2003 U.S.-led war before repaying creditors, Dallen said.
Of Citgo’s three refineries, the two in Louisiana and Texas rely on heavy Venezuelan crude, and face potential cutoff as Maduro’s government looks to market crude in other non-U.S. markets.
Both Dallen and Fernandez said the Trump administration could help those two refineries by releasing crude from the Strategic Petroleum Reserve, underground salt caverns that contain a reservoir of crude for use in national emergencies and to smooth out price volatility.