Sanctions prohibiting any transaction in U.S. currency by Venezuela's state-run oil firm, PDVSA, are among the toughest of various oil-related measures under discussion at the White House, the two sources told Reuters.
The administration aims to pressure socialist President Nicolas Maduro into aborting plans for a controversial new congress that critics say would cement him as a dictator.
Venezuela's oil-based economy is in the grip of a brutal recession and a local currency crash, and Maduro has faced months of anti-government unrest that has claimed the lives of about 100 people. Sanctions on dollar transactions would make it even harder for Maduro's government to secure cash for debt payments and finance imports of basic goods.
The White House declined to comment on the sanctions under consideration. PDVSA and Venezuela's Oil Ministry did not immediately respond to requests for comment.
The U.S. measures under discussion are similar to those that were imposed against Iran over its nuclear program - which halved Iran's oil exports and prevented top crude buyers from paying for Iranian oil.
The measures were seen as among the most effective economic sanctions ever imposed and paved the way for a deal that curbed Tehran's nuclear activity.
Measures on financial transactions would give President Donald Trump's administration the power to escalate pressure on Venezuela by threatening punishment of any U.S. firm doing business with PDVSA or U.S. banks processing any of its transactions in dollars.
The financial restrictions have been "raised repeatedly" in recent discussions about options for actions against Maduro's government, said the senior White House official, who spoke on condition of anonymity.
The administration is also discussing a ban on U.S. oil imports from Venezuela, but no final decisions have been reached, the official said.
Sanctions on dollar transactions could be more punitive than an import ban because they would make it much more difficult for any refiner or trader to buy Venezuelan oil - not just customers
in the United States.
The impact of sanctions on PDVSA would ripple across oil markets, forcing refiners to buy alternative supplies. The U.S. could use crude from its Strategic Petroleum Reserve (SPR) to blunt the impact of any short-term supply shortage, the policy adviser told Reuters.
The United States bought 780,000 barrels per day (bpd) of Venezuelan crude and refined products in the first four months of 2017, according to the Energy Information Administration,
nearly 8 percent of total imports. PDVSA is a major supplier to Valero Energy, Phillips 66, Chevron Corp and PBF Energy.
PDVSA's refining unit in the United States, Citgo Petroleum, last month was the second largest recipient of Venezuelan crude.
It is unclear how Citgo, being wholly owned by Venezuela, would be impacted by U.S. sanctions. Citgo operates three refineries, pipelines and a fuel distribution network in the United States.
The threat of sanctions against Venezuela was a key reason for talks this week between PDVSA and Rosneft, Russia's leading state-owned oil firm, which is already under U.S. sanctions. The negotiations in Moscow, reported by Reuters earlier this week, focused on a proposed swap of Rosneft's collateral stake in Citgo for a host of other Venezuelan oil assets - a move to avoid legal complications.