Trump Administration Relaxes Venezuela Oil Sanctions Amid Iran Conflict

The Treasury Department has loosened restrictions on Venezuelan oil trade, allowing U.S. companies to purchase from the state-owned PDVSA for the first time in years. The move comes as the Trump administration seeks to increase global oil supplies during ongoing tensions with Iran.

WASHINGTON — The Treasury Department announced Wednesday that American businesses can now engage with Venezuela’s government-owned petroleum company under relaxed sanctions, as the Trump administration searches for methods to increase global oil availability amid the conflict with Iran.

Treasury officials granted broad permission for Petróleos de Venezuela S.A. (PDVSA) to market Venezuelan crude directly to American firms and international buyers, marking a dramatic policy reversal after years of Washington blocking most commercial activity with Venezuela’s administration and energy industry.

Additionally, the White House announced Trump will suspend Jones Act provisions for 60 days, eliminating requirements that cargo between American ports travel on U.S.-registered ships. This Depression-era legislation, created to safeguard domestic shipbuilding interests, is frequently cited as contributing to higher fuel costs.

These policy changes underscore mounting pressure on the Republican government to address climbing oil costs as America and Israel continue military operations against Iran with no clear conclusion in sight. International petroleum prices have surged after Iran blocked shipping through the critical Strait of Hormuz, a waterway that typically handles one-fifth of global oil exports from the Persian Gulf region.

The Treasury’s authorization aims to encourage fresh investment in Venezuela’s energy infrastructure and benefit both nations while expanding worldwide oil availability, according to a Treasury representative who spoke to The Associated Press on condition of anonymity.

Following Nicolás Maduro’s removal and detention during a U.S. military intervention in January, President Trump declared America would essentially ‘manage’ Venezuela and market its petroleum resources.

The Treasury’s new authorization offers selective sanctions relief without completely removing penalties. Companies established before January 29, 2025, may now purchase Venezuelan oil and conduct previously prohibited transactions, reopening global market access for this significant oil producer.

However, restrictions remain in place.

Revenue cannot flow directly to sanctioned Venezuelan organizations like PDVSA, but must instead go to a designated U.S.-supervised account. Essentially, America will permit oil commerce while maintaining financial oversight.

Furthermore, agreements involving Russia, Iran, North Korea, Cuba, and certain Chinese companies remain prohibited. Venezuelan debt or bond transactions also stay banned.

This authorization should significantly strengthen Venezuela’s petroleum-reliant economy and encourage hesitant investors. The decision represents part of the Trump administration’s gradual strategy to rehabilitate Venezuela. However, critics of the interim Venezuelan leadership contend this policy rewards Venezuelan officials — all remaining loyal to Maduro and his political party — despite ongoing oppression, corruption, and human rights violations.

Most government employees earn approximately $160 monthly, while average private sector workers made about $237 last year, as annual inflation reached 475% according to Venezuela’s central bank, pushing food prices beyond many citizens’ reach.

Venezuela possesses the planet’s largest proven oil reserves, which previously fueled Latin America’s most robust economy. Yet corruption, poor management, and American economic penalties caused output to plummet from 3.5 million barrels daily in 1999 when Maduro’s predecessor Hugo Chávez assumed leadership, to under 400,000 barrels daily by 2020.

Previously, the Treasury Department during Trump’s first term excluded Venezuela from international oil markets by sanctioning PDVSA as punishment for Maduro’s administration’s corrupt, undemocratic, and criminal behavior. This forced the government to sell remaining production at steep discounts — roughly 40% below market value — to purchasers like China and other Asian buyers. Venezuela even began accepting Russian rubles, bartered merchandise, or digital currencies as payment.

The updated authorization prohibits payments in gold or cryptocurrency, including the petro, a digital token Venezuela’s government launched in 2018.