Washington, Caracas open Venezuela to allow more oil sales

The US Treasury Department opened Venezuela’s oil sector to companies seeking to sell or transport crude on Jan. 29, while keeping other US sanctions on Caracas in place.

The same day, Venezuela’s acting President Delcy Rodriguez signed a law to ease state control of the country’s oil industry, allowing private companies to take over the management, risk, and expense of oil projects.

As the first broad easing of US sanctions since the Jan. 3 capture of former Venezuelan President Nicolas Maduro, General License 46 (GL 46)—issued by Treasury’s Office of Foreign Assets Control (OFAC)—allows for the “lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan origin oil, including the refining of such oil” by companies under certain conditions.

The move by OFAC expands the field of trading companies permitted to sell Venezuela’s oil. Previously, only Singapore-based Trafigura and Swiss-based Dutch multinational Vitol, two of the world’s largest commodity trading houses, were allowed to sell the first tranche of Venezuelan oil. The two companies won a US contract in January to market 30-50 million bbl of Venezuelan crude until June 2027.

ClearView Energy Partners LLC, in a Jan. 29 client note, described GL 46 as “‘America First, Others Must Ask’ sanctions relief.” The new rules generally prohibit transactions with individuals and entities “located in or organized under the laws of Russia, Iran, North Korea, or Cuba and relevant owned/controlled entities and joint ventures,” according to the license.

Still, ClearView Energy Partners said GL 46 does not rule out “specific licenses” authorizing those countries to participate in similar operations. It does “preserve case-by-case approvals,” which is consistent with recent Trump administration comments that China could still continue to purchase Venezuelan crude.

US Secretary of State Marco Rubio told the Senate Foreign Relations Committee on Jan. 28 that “China can buy the Venezuelan oil, but they’re going to have to buy it like everybody else in the world… at the normal price, and that money is going to flow back to the benefit of the Venezuelan people in a structured way.”

While the new rules do not ease restrictions on upstream activities, such as production and oilfield services, “GL 46 could still leave room for OFAC to approve upstream operations not already authorized under existing licenses on a case-by-case basis,” ClearView said.

The Washington, DC-based energy research firm also noted that while the OFAC license allows maritime activities—such as chartering vessels and arranging port and terminal services—it “explicitly rules out the use of US-sanctioned shadow tankers, preserving the U.S. quarantine as a source of leverage over Caracas.”

OFAC also requires that all contracts with the Venezuelan government or state-run Petróleos de Venezuela comply with US law and that any dispute resolution occur in the US.

Despite these changes, Western oil companies remain wary about investing in Venezuela, given the significant political and business risks and their previous experiences in the country.