U.S. companies will now be allowed to do business with Venezuela’s state-owned oil and gas firm, as the Trump administration has moved to further ease sanctions on the country as part of its broader effort to ease crude oil supply disruptions caused by the war in Iran.
On Wednesday, the Treasury Department’s Office of Foreign Assets Control issued a general license authorizing certain transactions involving Petroleos de Venezuela, S.A., more simply known as PdVSA. The license will allow the state-owned fossil fuel company to directly sell Venezuelan oil and gas to U.S. businesses that existed before Jan. 29, 2025, with certain stipulations.
Funds from the sales are not permitted to be sent directly to sanctioned individuals or entities, such as PdVSA, and must instead be sent to an account controlled by the U.S. government. Any transactions involving Russia, Iran, North Korea, Cuba, and some entities in China will not be allowed.
The license is a major step toward fully reopening oil trade between Venezuela and global markets since the Trump administration’s ousting and arrest of former dictator Nicolas Maduro in January.
The Treasury has already moved to lift sanctions to incentivize investments in the Venezuelan crude industry, from commodities traders to U.S. oil and gas producers, to rapidly scale up production. The Trump administration has said it aims to increase Venezuela’s total oil production by 50% within the next 12 to 18 months.
A Treasury official told the Associated Press that the general license issued Wednesday was designed not only to further incentivize investments and benefit both the U.S. and Venezuela, but also to boost the global oil supply.
The Trump administration has been looking for various ways to prop up global markets amid supply disruptions in the Strait of Hormuz, particularly as consumers feel the strain of high prices. Ahead of the U.S.-Israeli attacks on Iran last month, about 20 million barrels of oil passed through the waterway daily, equivalent to around one-fifth of global demand.
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The ongoing conflict has brought transit to an effective standstill, with analysts estimating that 180 million to 250 million barrels of oil have been removed from global supply.
These disruptions have sent international and domestic oil prices soaring, significantly raising gasoline costs and making it harder for Trump to keep his campaign promise to slash prices at the pump.
