US Eases Venezuela Oil Sanctions To Boost Trade As Iran War Roils Global Markets

Last Updated:March 19, 2026, 01:01 IST

The US Treasury Department allowed companies to buy Venezuelan oil and engage in transactions that would normally be banned under American sanctions amid soaring oil prices.

The Trump administration has eased sanctions, with some limitations, on Venezuelan oil to allow companies to do business with the country’s state-owned oil and gas company amid surging energy costs due to the war with Iran in West Asia.

The US Treasury Department on Wednesday issued a broad authorisation allowing Petróleos de Venezuela SA, or PDVSA, to directly sell Venezuelan oil to US companies and on global markets, marking a significant shift in US policy after blocking dealings with Venezuela’s government and its oil sector for years.

A Treasury official told the Associated Press that the move is designed to incentivise new investment in Venezuela’s energy sector and is intended to benefit both the US and Venezuela, while increasing the global oil supply.

The US license provides targeted relief from sanctions with some reliefs, by allowing companies to buy Venezuelan oil and engage in transactions that would normally be banned under American sanctions. However, payments cannot go directly to sanctioned Venezuelan entities like the PDVSA, but must be sent to a special US-controlled account. Additionally, deals involving Russia, Iran, North Korea, Cuba and some Chinese entities will not be allowed.

The license is expected to give a massive boost to Venezuela’s oil-dependent economy and help encourage companies that have been apprehensive to invest in its oil sector. The decision is part of the Trump administration’s phased-in plan to turn around Venezuela.

Venezuela controls one of the world’s largest oil reserves and was once Latin America’s strongest economy, but decades of corruption, mismanagement and US sanctions have led to a steep decline in production.

The first Trump administration had pushed Venezuela out of world oil markets when it sanctioned PDVSA as part of a policy punishing Maduro’s government for corrupt, anti-democratic and criminal activities. This forced the Venezuelan government to sell its remaining oil output at a discount — about 40% below market prices — to buyers such as China and in other Asian markets.

US Waives Jones Act For 60 Days

Separately, the White House announced that the administration would waive the Jones Act requirements for goods shipped between US ports to be moved on US-flagged vessels. The 1920s law had imposed a ban on foreign vessels transporting cargo between US ports to promote American shipbuilding, but critics say it hampered free trade and raised energy costs.

The move is “just another step to mitigate the short-term disruptions to the oil market as the US military continues meeting the objectives of Operation Epic Fury," said White House Press Secretary Karoline Leavitt in a statement, referring to the US campaign against Iran.

“This action will allow vital resources like oil, natural gas, fertilizer and coal to flow freely to US ports for 60 days," she added.

Trump Administration Under Pressure

The moves highlighted the pressure on the Trump administration to ease soaring oil prices as the US-Israeli war with Iran is set to enter its fourth week with no clear end in sight. Oil prices have skyrocketed as Iranian attacks have brought commercial shipping through the Strait of Hormuz to a virtual halt.

Average US gasoline prices have jumped more than 27% since the start of the war, which has strained US household budgets, while consumers are already grappling with high costs of living. This has put pressure on Republicans ahead of the midterm elections in November.

US Vice President JD Vance touched on the issue on Wednesday during a visit to a manufacturing facility in Michigan: “We’ve got a rough road ahead of us for the next few weeks, but it’s temporary."

(with inputs from agencies)

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