US to issue general licence easing sanctions on Venezuela’s oil industry: Report

US officials are preparing to issue a general license that would ease sanctions on Venezuela’s energy sector, a move aimed at jumpstarting oil exports and accelerating investment after the capture of President Nicolas Maduro earlier this month, Reuters reported on Tuesday, citing sources familiar with the matter.

The planned license would mark a shift from Washington’s earlier approach of granting individual exemptions to companies seeking to do business with Venezuela. A broader authorization would unclog approvals, revive stalled projects and help implement a proposed $2 billion oil supply deal between Caracas and Washington, alongside an ambitious $100 billion reconstruction plan for Venezuela’s oil industry.

The change comes as the US seeks to stabilise oil flows from the OPEC member, whose output and exports have been battered by years of sanctions, underinvestment and infrastructure decay.

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Why Washington is changing tack

Following Maduro’s capture, US officials signalled that sanctions imposed on Venezuela’s energy industry would be eased to facilitate a reset in bilateral energy ties. However, the initial plan to rely on company-by-company licenses has proven cumbersome.

Major partners and customers of state oil firm PDVSA, including Chevron, Repsol, ENI and several US oil service providers, have filed a flurry of individual applications in recent weeks to expand production or exports. The sheer volume of requests has slowed decision-making and delayed efforts to quickly ramp up exports and investment, the report said.

A general license, officials now believe, would remove bottlenecks and provide clarity to companies waiting on approvals.

Sanctions history and shifting US policy

Venezuela’s entire energy sector was designated under US sanctions by the Treasury’s Office of Foreign Assets Control in 2019, after Maduro’s first re-election, a vote Washington did not recognise.

Since then, sanctions have waxed and waned depending on the US administration, shaped by executive orders and licenses that selectively exempted certain producers and buyers.

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Under former president Joe Biden, a broad license allowed many companies to export Venezuelan oil, helping lift crude production and shipments until early last year. That policy was reversed after Donald Trump began his second term, revoking the authorisation to increase pressure on Maduro and ordering companies to wind down operations.

In December, Trump also imposed a blockade on all sanctioned vessels entering or leaving Venezuela, sharply cutting oil exports to about 500,000 barrels per day that month from 952,000 bpd in November.

Exports struggle, inventories pile up

Despite last year’s average exports of around 850,000 bpd PDVSA has struggled in recent weeks. The blockade triggered a rapid buildup of crude inventories, forcing output cuts in early January.

Some relief has come from US licenses granted this month to trading houses Vitol and Trafigura, allowing them to supply up to 50 million barrels of Venezuelan oil to the US and other destinations. Those approvals have already helped drain about 11.3 million barrels from storage, according to PDVSA documents and shipping data. Even so, millions of barrels remain stranded in tanks and vessels.

Oil executives say additional licenses are urgently needed to accelerate exports, raise output at fields with available equipment, boost domestic refining and repair crumbling infrastructure and an unstable power grid.

What the new license could include

The report said the general license under preparation could give preferential treatment to US firms, reflecting the Trump administration’s “America First” approach.

Meanwhile, Venezuela is moving on the legislative front. A sweeping reform of the country’s main oil law, designed to make investment, production and exports more attractive, passed an initial vote last week. Final approval by the National Assembly is expected as early as next week, the report said.

If combined with broad US sanctions relief, the reforms could mark the most significant opening of Venezuela’s oil sector in years, reshaping energy flows at a time of heightened global supply uncertainty.