Reading time: 2 min
The Trump administration is preparing to issue a general license allowing companies to pump oil in Venezuela, marking a significant shift in US sanctions policy that could reshape global energy markets. The Treasury Department could issue the new license as early as this week, according to people familiar with the measure.
Major Policy Reversal Unfolds
The move represents a key step to attract companies with US ties to revitalize output in Venezuela, which holds among the world’s largest oil reserves. This comes following a US military operation in Caracas that captured former President Nicolás Maduro on January 3.
Taylor Rogers, a White House spokeswoman, confirmed the administration’s commitment to the strategy, stating: “The President’s team is working around the clock to ensure oil companies are able to make investments in Venezuela’s oil infrastructure. Stay tuned!”
Last week, the US had already issued a separate general license allowing companies to buy and sell Venezuelan oil, covering downstream operations including loading oil onto tankers, exporting, transporting and refining crude when carried out by “an established US entity.”
Strategic Framework Takes Shape
The administration has given individual approvals to trading houses Trafigura Group and Vitol Group to restart Venezuela’s oil sales after a partial US naval blockade had stymied exports and filled the country’s storage tanks. As this bottleneck eases, Venezuela’s heavy sour oil is returning to the global market with focus shifting to US refiners rather than Chinese buyers, which for years absorbed most of the supply at steep discounts due to sanctions.
After capturing Maduro, the Trump administration backed his former vice president, Delcy Rodríguez, and announced plans to stabilize the country’s economy by taking control of its dilapidated oil industry. A central element requires companies with US connections operating in Venezuela to deposit payments into a US-controlled account in Qatar, with the Trump administration releasing funds to Venezuela’s Central Bank, which later auctions dollars to private local operators.
Broader Implications
The policy shift comes as the US has also reopened Venezuelan airspace to commercial flights. Inside Venezuela, the Rodríguez government has improved fiscal terms for oil companies and is releasing political prisoners. However, companies with no foothold in Venezuela remain wary of political risks, including questions about the durability of the present government.
Historically, the US was the top destination for Venezuelan oil before sanctions were imposed, making this policy reversal particularly significant for global energy flows and potentially affecting regional energy dynamics as supply patterns shift back toward traditional routes.
Sources: Unlock Bc, Financialpost
