The Donald Trump administration lifted key sanctions on Venezuela’s oil industry, authorizing US companies to buy, sell, transport and refine Venezuelan crude as the White House declared Washington intends
to control the nation’s oil sales “indefinitely” following the dramatic military raid that captured Nicolas Maduro.
The measure by the Treasury’s Office of Foreign Assets Control represents the most significant easing of restrictions since the United States imposed blanket sanctions on Venezuela’s energy sector in 2019. It arrives amid extraordinary circumstances: Trump has said the United States will control Venezuela’s oil revenues following the January 3 US military operation in Caracas that seized the country’s leader.
What Does New Authorization Actually Allow?
The Treasury’s general license permits US companies to engage in transactions involving Venezuelan crude oil, including “the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery or transportation of Venezuelan-origin oil, including the refining of such oil.”
But the authorization conspicuously excludes new production activities, which would require separate approvals. It also bars involvement by firms and individuals from China, Iran, North Korea, Cuba and Russia- nations Washington considers rivals or adversaries.
Why Hasn’t Production Been Authorized Yet?
The new license does not permit US companies to invest in expanding Venezuelan oil production- a curious omission given Trump’s stated goal of securing $100 billion in American investment to restore the OPEC member’s output to historic peaks. Expanding production would require additional US authorizations which the administration has not yet granted.
What About Existing Deals?
Washington and Caracas have already agreed to an initial deal to sell 50 million barrels of Venezuelan crude, with European trading houses Vitol and Trafigura marketing the supply. The new authorization broadens participation beyond these arrangements to any US company, provided they comply with commercial payment terms. The license specifically prohibits payment terms involving debt swaps, payments in gold or transactions denominated in digital currency.
How Is Venezuela Responding?
Venezuelan lawmakers approved sweeping changes to the country’s oil laws, granting foreign energy companies greater operational control and opening the door to sharply reduced royalties. The legislation allows overseas firms to directly manage production projects, effectively reducing the role of state-run Petroleos de Venezuela (PDVSA) and permits companies to settle disputes through international arbitration rather than Venezuela’s courts. It also enables authorities to lower taxes and royalties paid to the government, although PDVSA will remain under state ownership.
