Treasury easing Venezuela oil sanctions in bid to boost global supply

The Treasury Department on Wednesday eased sanctions on some Venezuelan oil companies in an apparent bid to help global oil supply amid a deepening economic crisis due to the escalating conflict with Iran.  

The issued license authorizes Petróleos de Venezuela, S.A. (PdVSA) and any entity it holds majority ownership in to sell Venezuelan oil and petroleum products directly to U.S. companies, with some restrictions.

The U.S. will still control the cash flow from these transactions, according to the Associated Press, which noted that payments are restricted from going to PdVSA and must instead be held in a special U.S.-controlled account.

The Treasury also prohibited PdVSA from selling oil to Russia, Iran, Korea and some Chinese entities.

The move comes as the Trump administration is facing growing pressure to tamp down surging oil and gas prices, as the U.S. and Tehran struggle for control of the Strait of Hormuz.

Shipping traffic through the strait, a narrow channel that transports about one-fifth of the world’s daily oil supply, has effectively stopped due to repeated Iranian threats and attacks against vessels attempting to pass through.

U.S. Central Command (CENTCOM) said on Tuesday that it dropped multiple 5,000-pound deep-penetrator bombs on Iranian anti-ship missile sites along the country’s coastline, days after American forces bombed Kharg Island, Iran’s primary oil export terminal in the Gulf.

The ongoing joint U.S.-Israeli strikes and Iran’s retaliatory campaign have roiled global markets, pushing crude oil prices back above $100 per barrel on Wednesday morning.

The price of Brent crude, the international benchmark, reached $109 a barrel as of 11:45 a.m. EDT.

The Trump administration separately announced on Wednesday that it would waive Jones Act shipping requirements for 60 days. The 100-year-old law mandates that shipping between U.S. ports be conducted by U.S.-flagged ships.

“This action will allow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports for sixty days, and the Administration remains committed to continuing to strengthen our critical supply chains,” White House Press Secretary Karoline Leavitt wrote on the social platform X.

That move was aimed at lowering gas prices, which have been steadily rising since the military operation began on Feb. 28. The nationwide average was $3.84 per gallon on Wednesday, according to AAA.

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