(Adds U.S. rejection of Maduro decision to cut ties)
By Matt Spetalnick and Roberta Rampton
WASHINGTON, Jan 23 (Reuters) - The Trump administration ratcheted up pressure on Venezuelan President Nicolas Maduro on Wednesday, signaling potential new sanctions against the country's vital oil sector as it recognized Venezuela's opposition leader as interim president.
With street protests against Maduro under way across Venezuela, President Donald Trump said the United States recognized Juan Guaido, head of the opposition-controlled National Assembly congress, as the country's leader and called socialist Maduro's government "illegitimate." response, Maduro said he was breaking diplomatic relations with the United States and giving U.S. embassy personnel 72 hours to leave Venezuela.
The United States, however, rejected Maduro's move to cut ties, saying it did not think he had the authority to sever ties and it would conduct relations with a government led by Guaido. senior U.S. official, speaking on condition of anonymity, warned Maduro and his loyalists that Washington was ready to ramp up oil, gold and other sanctions and take unspecified actions "if they choose to harm any of the National Assembly members or any of the other duly legitimate officials of the government of Venezuela."
Asked whether he was considering U.S. military intervention, Trump told reporters: "We're not considering anything, but all options are on the table."
Venezuelan opposition sympathizers had been urging Guaido to assume the presidency since Maduro was inaugurated for a second term on Jan. 10, following a widely boycotted election last year that many foreign governments characterized as fraudulent.
Formal U.S recognition of Guaido could be complicated, however, by questions of how to deal with Venezuela's U.S.-based diplomats and who would now control its bank accounts and other U.S. assets, which include Citgo, the U.S. refining arm of Venezuelan state-run oil company PDVSA PDVSA.UL .
The senior administration official told reporters that Washington now regards Guaido and the National Assembly as the "legitimate decision-makers" in transactions between the United States and Venezuela and that there would be a "whole bunch of consequences," but declined to elaborate.
U.S. recognition of Guaido could backfire if Maduro, who accused the opposition of attempting a coup, used it as a pretext to detain Guaido or other opposition figures.
After Trump's announcement, most major Latin American countries made similar moves recognizing Guaido, and a Canadian official said Ottawa would also follow suit. But leftist-governed Mexico said it continued to recognize Maduro as president.
"@NicolasMaduro has undertaken a fight with the U.S. & international community he has no chance of winning," U.S. Senator Marco Rubio said in a message on Twitter.
Rubio, who led a delegation of Florida lawmakers to discuss Venezuela with fellow Republican Trump on Tuesday, is considered to have played a major role since Trump took office in convincing him to take a tougher stand against Maduro.
NEW OIL SANCTIONS
Multiple sources said the Trump administration could impose new U.S. sanctions on Venezuela's oil industry as soon as this week.
U.S. officials are considering a range of potential measures, including restricting U.S. imports of Venezuelan oil or even a full ban, but no final decisions have been made, two people familiar with the matter told Reuters.
Two other sources briefed on the matter said the Trump administration informed U.S. energy companies of its deliberations.
The decision on whether to go ahead could depend on how harshly Maduro cracks down on protesters and how he responds to Guaido's swearing-in, several of the sources said.
Even then, the administration would likely hold further discussions that could delay any final move, one source said.
The Trump administration has been increasingly frustrated with existing sanctions on Venezuela, which have spared oil exports so far. Targeting oil shipments to the United States could choke off significant revenue to the OPEC member nation.
The United States has held off on broad, oil-related measures, mindful of the potential not only for deepening the hardships of the Venezuelan people but also the risk of causing problems for U.S. companies and consumers.
U.S. refiners such as Valero Energy Corp (NYSE:VLO) VLO.N , Chevron Corp (NYSE:CVX) CVX.N and PBF Energy Inc PBF.N have had discussions about the possibility of such sanctions with the Trump administration in recent weeks.
Venezuelan crude exports to the United States last year fell 15 percent to the lowest annual average in nearly three decades, according to Refinitiv Eikon data.
Still, some U.S. refineries have equipment specifically designed for heavy grades of crude like those from Venezuela. They imported about 500,000 barrels per day last year, according to the U.S. Energy Information Administration.