The Trump administration has imposed sweeping sanctions on Venezuelan state-owned oil firm PDVSA, the toughest US financial measure so far against Venezuelan President Nicolas Maduro.
The sanctions were announced to ratchet up pressure against Mr Maduro and demonstrate US support for Juan Guaido, the Venezuelan opposition leader who proclaimed himself interim president last week and was immediately recognised by the US and a host of other countries.
"We have continued to expose the corruption of Maduro and his cronies and today's action ensures they can no longer loot the assets of the Venezuelan people," US national security adviser John Bolton told reporters at a White House briefing.
PDVSA is OPEC nation Venezuela's largest source of revenue and owns US refining arm Citgo Petroleum, Venezuela's most important foreign asset.
US officials said the sanctions on PDVSA were intended to prevent Mr Maduro's government from siphoning off funds from the oil company.
Mr Bolton said the announcement would block $7 billion in PDVSA's assets "plus over $11 billion in lost export proceeds over the next year."
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Until now, US President Donald Trump had held off on targeting Venezuela's vital oil sector.
Washington has been mindful of the potential to deepen the hardship of the Venezuelan people and hurt US companies and American consumers.
In an apparent effort to minimise negative fallout in the US, Treasury Secretary Steven Mnuchin said Citgo in the US would be able to continue to operate provided funds go to a blocked account.
He said oil supplies were sufficient to ensure no significant impact on US gas prices in the short term.
Even though the Venezuelan military has shown no sign of abandoning Mr Maduro, Mr Bolton said: "Our assessment based on numerous contacts on the ground is that the rank and file of the Venezuelan military is acutely aware of the desperate economic conditions in the country and we think they look for ways to support the National Assembly government."
Countries around the world have recognized Mr Guaido as Venezuela's rightful leader, and the United States vowed to starve Mr Maduro's administration of oil revenue after he was sworn in on 10 January for a second term that was widely dubbed illegitimate.
Mr Maduro says the US is promoting a coup against him and promised to stay in office, backed by Russia and China, which have bankrolled his government and fought off efforts to have his government disavowed by the United Nations.
