UPDATE 2-Trump expected to recognize opposition leader as Venezuelan president-sources

The Trump administration ratcheted up pressure on Venezuela's President Nicolas Maduro on Wednesday, preparing to announce U.S. recognition of the country's opposition leader as interim president and signaling potential sanctions against its vital oil sector. With street protests against Maduro underway across Venezuela, U.S. President Donald Trump was expected to recognize Juan Guaido, head of the opposition-controlled Congress, as the country's legitimate leader as soon as Wednesday, according to two people familiar with the matter.

The administration had been waiting to issue its announcement after Guaido had been sworn in as the country's temporary president, the sources said. Guaido was took the oath on Wednesday afternoon. Venezuelan opposition sympathizers had been urging Guaido to assume the presidency since Maduro was inaugurated to a second term on Jan. 10 following a widely boycotted election last year that the United States and many other foreign governments described as a fraudulent.

Guaido, a newcomer on the national scene who was elected to head Congress on Jan. 5, has said he is willing to replace Maduro if he has the support of the military, with the aim of then calling for free elections. U.S. officials have stated that Maduro's claim on power is illegitimate and have openly declared support for Guaido.

The sources acknowledged that any formal recognition of Guaido would be complicated by questions of how to deal with Venezuela's U.S.-based diplomats. Such a move could also backfire if Maduro took action to prevent Guaido from being sworn in or used it as a pretext to detain him again. Adding to pressure on Maduro, multiple sources said the Trump administration could impose new U.S. sanctions on Venezuela's vital oil sector as soon as this week if the political situation there deteriorates further.

U.S. officials are considering a range of potential measures, including restricting U.S. imports of Venezuelan oil or even a full ban, to punish Maduro's government but no final decisions have been made as Washington closely watches the street protests unfolding in the country, two people familiar with the matter told Reuters. Two other sources briefed on the matter said the U.S. administration had privately informed U.S. energy companies of its deliberations. (Reporting by Matt Spetalnick; editing by Jeffrey Benkoe and Tom Brown)