The U.S. Treasury Department announced Wednesday a broad authorization allowing Venezuela's state oil company Petróleos de Venezuela S.A. (PDVSA) to sell crude directly to American firms and on global markets. The move provides targeted sanctions relief without fully lifting restrictions imposed since 2019, when the first Trump administration sanctioned PDVSA to counter the Maduro regime's corruption and anti-democratic actions.

Payments from these sales cannot flow directly to PDVSA or other sanctioned Venezuelan entities. Instead, proceeds must go to a U.S.-controlled account, prohibiting transactions involving Russia, Iran, North Korea, Cuba, certain Chinese firms, Venezuelan debt, bonds, gold, or cryptocurrency like the petro. The license applies only to companies established before January 29, 2025, aiming to incentivize investment in Venezuela's dilapidated energy infrastructure.

The announcement, made at 10:01 a.m. EDT, comes amid an acute global energy crunch triggered by the ongoing war between the U.S., Israel, and Iran. Iran has halted traffic through the Strait of Hormuz, disrupting one-fifth of the world's seaborne oil trade and causing the largest supply shock in oil market history, according to the International Energy Agency. Brent crude traded at $108.78 per barrel as of 9:15 a.m. EDT Wednesday, while West Texas Intermediate hovered around $95 to $98.

President Donald Trump also directed a 60-day waiver of the Jones Act, easing requirements for U.S.-flagged vessels to transport oil, natural gas, fertilizer, and coal between domestic ports. White House press secretary Karoline Leavitt said the waiver would "mitigate the short-term disruptions to the oil market during the Iran war" and ensure vital resources flow freely. A Treasury official noted the license would "benefit both the U.S. and Venezuela, while increasing the global oil supply."

This builds on earlier 2026 actions following a U.S. military operation in January that ousted and arrested Nicolás Maduro. The Trump administration has issued general licenses, including GL 46 on January 29, enabling U.S. firms like Chevron to negotiate contracts and invest in upstream production. Venezuela holds the world's largest proven oil reserves, but output plummeted from 3.5 million barrels per day in 1999 to under 400,000 by 2020 due to mismanagement, corruption, and sanctions.

Analysts expect the relief to encourage private investment, potentially $100 billion over a decade, to revive production, though near-term gains may be limited to 300,000 barrels daily. The steps aim to stabilize prices, support U.S. energy security, and bolster Venezuela's economy, where inflation hit 475% last year, and average wages languish below $250 monthly.