US Eases Venezuela Oil Sanctions as Trump Seeks to Boost World Oil Supply During Iran War

  • U.S. companies will be allowed to do business with Venezuela’s state-owned oil and gas company after the Treasury Department eased sanctions, with some limitations, on Wednesday as the Trump administration looks for ways to boost world oil supplies during the Iran war. The Treasury issued a broad authorisation allowing Petróleos de Venezuela S.A, or PDVSA, to directly sell Venezuelan oil to U.S. companies and on global markets, a massive shift after Washington for years had largely blocked dealings with Venezuela’s government and its oil sector.
  • The Treasury’s license is designed to incentivise new investment in Venezuela’s energy sector and is intended to benefit both the U.S and Venezuela, while increasing the global oil supply. The U.S. license provides targeted relief from sanctions, but does not lift the penalties altogether, allowing companies that existed before January 29, 2025, to buy Venezuelan oil and engage in transactions that would normally be banned under American sanctions, reopening trade for a major oil producer to global markets.
  • There are some limits. Payments cannot go directly to sanctioned Venezuelan entities such as PDVSA, but must be sent instead to a special U.S.-controlled account. In other words, the U.S. will allow the oil trade but will control the cash flow. Additionally, deals involving Russia, Iran, North Korea, Cuba and some Chinese entities will not be allowed. Transactions involving Venezuelan debt or bonds will not be allowed.
  • The license is expected to give a massive boost to Venezuela’s oil-dependent economy and help encourage companies that have been apprehensive to invest. The decision is part of the Trump administration’s phased-in plan to turn around Venezuela.
  • Separately, the White House said Trump would waive, for 60 days, Jones Act requirements for goods shipped between U.S. ports to be moved on U.S.-flagged vessels. The moves highlight the increased pressure that the Republican administration is under to ease soaring oil prices as the United States, along with Israel, wages a war with Iran without a foreseeable end date.

(Source: Associated Press)