The United States has approved new licences allowing major international energy companies — BP plc (LSE: BP), Chevron Corporation (NYSE: CVX), Shell plc (LSE: SHEL), Eni S.p.A. (BIT: ENI) and Repsol S.A. (BME: REP) — to resume oil and gas operations in Venezuela, marking a significant shift in U.S. sanctions policy toward the OPEC nation’s energy sector.
The licences were issued by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and authorize defined transactions tied to upstream production and related activities under specified compliance conditions. The decision signals renewed Western engagement with one of the world’s largest proven crude reserves and introduces potential implications for global oil supply dynamics.
The licences were issued by the Office of Foreign Assets Control, a division of the US Treasury Department. They authorise transactions related to oil and gas operations in Venezuela, under clearly defined conditions set by Washington.
This move comes shortly after the removal of Venezuela’s former president Nicolás Maduro on January 3. After his removal, Delcy Rodríguez assumed leadership on an interim basis and has worked closely with U.S. officials. Her administration has been publicly praised by Washington for quickly passing legal reforms affecting the oil sector.
Sanctions Relaxed as OFAC Issues New Oil Licences
For years, Venezuela’s oil industry operated under strict U.S. sanctions imposed in 2019. These measures limited foreign involvement and contributed to a steep decline in production by cutting off access to capital, equipment, and technical support.
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The newly issued general licences ease those restrictions. They allow BP, Chevron, Eni, Repsol, and Shell to carry out oil and gas sector operations that were previously blocked. This includes production-related transactions and operational activities, provided all conditions are met.
The licences also place firm limits on how money is handled. Any payments linked to oil and gas royalties must be sent only to bank accounts designated by the U.S. Treasury. This requirement reflects U.S. statements that Venezuelan assets will be managed in custody for the benefit of the country.
In addition to the general licences, OFAC issued a second licence allowing companies to negotiate potential contracts for certain energy investments in Venezuela. While negotiations are now permitted, the U.S. government continues to restrict participation by companies connected to specific countries.
Firms linked to China, Russia, and Iran remain barred from involvement in Venezuela’s oil sector under existing sanctions rules. These restrictions remain unchanged despite the broader easing for approved Western companies.
Oil Production Levels and Policy Shift
U.S. officials have stated that the long-standing oil embargo on Venezuela is now effectively over. Chris Wright said the embargo, which had been in place since 2019, no longer prevents authorised oil activity under the new licensing framework.
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Wright recently travelled to Caracas, becoming the highest-level U.S. official to visit the country since Maduro’s removal. During the visit, he called for a dramatic increase in Venezuela’s production of oil, natural gas, and electricity, stating that higher output would help improve jobs, wages, and overall living conditions.
Venezuela’s oil production has already shown signs of recovery in recent years. In 2020, output fell to a historic low of about 360,000 barrels per day. By 2025, production had risen to around 1.2 million barrels per day. Despite this improvement, production remains far below the approximately 3 million barrels per day the country was producing 25 years ago.
The return of major international oil companies is expected to support existing operations under close oversight. The licences do not permit unrestricted activity, and all transactions must comply with U.S. sanctions regulations.
Royalties and other payments generated from oil and gas operations must follow strict financial controls. The interim Venezuelan leadership has introduced legal changes to the oil sector, which U.S. officials cited as a key factor behind the decision to grant the licences.
The approval allowing BP, Chevron, Eni, Repsol, and Shell to resume limited operations represents one of the most significant changes to Venezuela’s oil sector since sanctions were introduced, reopening controlled access to one of the world’s largest oil reserves.