Trump claimed the U.S. would “run” Venezuela and sell its oil — now it’s beginning to happen

(SeaPRwire) –   U.S. companies are now permitted to conduct business with Venezuela’s state-owned oil and gas company, Petróleos de Venezuela S.A. (PDVSA), following a Wednesday decision by the Treasury Department to ease certain sanctions. This move comes as the Trump administration seeks to increase global oil supplies amidst the ongoing Iran war.

The Treasury Department issued a broad authorization enabling PDVSA to sell Venezuelan oil directly to U.S. companies and on international markets. This represents a significant policy reversal after years of Washington largely prohibiting dealings with Venezuela’s government and its oil sector.

This development underscores the increasing pressure on the Republican administration to address rising oil prices. The United States, alongside Israel, is engaged in a protracted war with Iran, which has led to disruptions in global oil traffic. Iran has halted passage through the Strait of Hormuz, a critical chokepoint for approximately one-fifth of the world’s oil exports from the Persian Gulf.

According to a Treasury official who spoke on condition of anonymity, the U.S. action is intended to stimulate new investment in Venezuela’s energy sector, benefiting both the U.S. and Venezuela while boosting global oil availability. The official was not authorized to speak publicly on the matter.

Following the removal and arrest of Nicolás Maduro as Venezuela’s president during a U.S. military operation in January, President Donald Trump had stated that the U.S. would effectively manage Venezuela and oversee the sale of its oil.

The Treasury Department’s license offers specific relief from sanctions but does not remove them entirely. It permits companies established before January 29, 2025, to purchase Venezuelan oil and engage in transactions that would typically be prohibited under U.S. sanctions, thereby reopening trade for a major oil producer to global markets.

Certain restrictions remain in place.

Payments are not to be made directly to sanctioned Venezuelan entities like PDVSA. Instead, funds must be directed to a specially designated U.S.-controlled account. This arrangement signifies that while the U.S. is allowing oil trade, it will maintain control over the financial transactions.

Furthermore, transactions involving Russia, Iran, North Korea, Cuba, and certain Chinese entities are prohibited. Deals related to Venezuelan debt or bonds are also not permitted.

The license is anticipated to provide a substantial boost to Venezuela’s oil-dependent economy and encourage hesitant companies to invest. This decision is part of the Trump administration’s gradual strategy to revitalize Venezuela. However, critics of the current Venezuelan government contend that this move rewards leadership loyal to Maduro and the ruling party, despite ongoing issues of repression, corruption, and human rights abuses.

Many public sector employees in Venezuela subsist on approximately $160 per month. Last year, the average private sector employee earned about $237, while the annual inflation rate reached a staggering 475%, according to Venezuela’s central bank, making food unaffordable for many.

Venezuela possesses the world’s largest oil reserves and once fueled what was considered Latin America’s most robust economy. However, a combination of corruption, mismanagement, and U.S. economic sanctions has led to a significant decline in production. Output fell from 3.5 million barrels per day in 1999, when Hugo Chávez, Maduro’s mentor, assumed power, to less than 400,000 barrels per day in 2020.

The previous year, the Treasury Department under the first Trump administration blocked Venezuela from global oil markets by sanctioning PDVSA. This action was part of a policy aimed at penalizing Maduro’s government for alleged corrupt, anti-democratic, and criminal activities. Consequently, the Venezuelan government was forced to sell its remaining oil at a discount, approximately 40% below market prices, to buyers in countries like China and other Asian markets. Venezuela even resorted to accepting payments in Russian rubles, bartered goods, or cryptocurrency.

The new license explicitly prohibits payments in gold or cryptocurrency, including the petro, a digital token introduced by the Venezuelan government in 2018.

Garcia Cano reported from Caracas, Venezuela.