The United States is allowing major global oil companies to resume energy production in Venezuela after loosening sanctions on the country’s energy sector, marking a major shift in policy following the removal of Venezuelan leader Nicolás Maduro. The move is being framed by U.S. officials as both an economic opportunity and a strategic step toward stabilizing the region while advancing American energy interests.
Treasury Department Clears Major Companies to Resume Operations
On Feb. 13, the Treasury Department’s Office of Foreign Assets Control issued a broad license permitting several major energy companies to restart operations in Venezuela. The companies include BP, Chevron, Eni, Shell, and Repsol, all of which had maintained some presence in the country despite years of sanctions.
The authorization also allows companies around the world to negotiate new investments in Venezuela’s oil and gas sector, although those agreements require additional approvals. However, the policy explicitly blocks participation by China, Iran, and Russia, as well as firms tied to those countries.
The decision represents the largest rollback of U.S. sanctions on Venezuela since U.S. forces captured and removed Maduro from power in January. The United States had maintained sanctions since 2019.
Why Oil Production Was Previously Halted
Sanctions and political instability had severely limited Venezuela’s energy production for years. Under socialist governments led by Hugo Chavez and later Maduro, foreign companies faced asset seizures and threats of expropriation. The Venezuelan government seized assets belonging to Exxon Mobil and ConocoPhillips in 2007, which helped drive away international investment.
Despite possessing what is estimated to be the world’s largest commercially viable oil reserves at about 300 billion barrels, Venezuela failed to capitalize on its resources due to deteriorating infrastructure, corruption, and economic mismanagement.
A Treasury spokesperson explained the new policy direction, stating that Venezuela “holds tremendous economic potential, but years of instability, corruption, and economic mismanagement have limited the nation’s growth and prosperity.”
The spokesperson added that the licenses are intended to encourage responsible development, saying they “invite American and other aligned companies to play a constructive role in supporting economic recovery and responsible investment.”
The new authorizations took effect immediately upon issuance in mid February. Under the arrangement, payments such as royalties and taxes will be routed through a U.S. controlled Foreign Government Deposit Fund rather than directly to Venezuelan authorities.
Energy Secretary Chris Wright said the United States will maintain control over oil revenue until political reforms are established. He explained that the proceeds will go “into an account controlled by the U.S. government and released to authorities in Venezuela, subject to audit in Venezuela, and subject to continued positive progress in addressing American issues with Venezuela.”
Wright also emphasized that President Donald Trump will ultimately decide how funds flow into Venezuela, saying Trump will have the final determination “over the flow of funds into Venezuela.”
According to Wright, recent oil sales have already generated about $1 billion and could produce another $5 billion in the coming months.
Trump’s Strategic Goals for Venezuela
The Trump administration is pursuing an ambitious strategy centered on rebuilding Venezuela’s energy industry and strengthening Western Hemisphere cooperation. Trump has urged U.S. and foreign energy companies to invest as much as $100 billion to modernize Venezuela’s oil infrastructure.
He also confirmed that interim Venezuelan authorities could sell up to 50 million barrels of oil to the United States.
Wright described the broader vision during a press briefing alongside Venezuela’s acting leadership, saying, “This year, we can drive a dramatic increase in Venezuelan oil production, in Venezuelan natural gas production, in Venezuelan electricity production, to increase the job opportunities, the wages, and the quality of life for all of the Venezuelans across the country.”
He added that expanded production “will also enormously benefit the United States, the Western Hemisphere, and the future partnership for all of us.”
The administration has even suggested the federal government could reimburse companies that help rebuild Venezuela’s energy sector, signaling a long term commitment to restoring production capacity.
Why Venezuelan Oil Matters to the United States
Venezuelan crude is typically heavy and difficult to refine, but the United States is uniquely positioned to process it. Refineries in Louisiana and Texas include some of the world’s largest facilities designed specifically for heavy crude.
With oil prices rising amid geopolitical tensions and energy markets tightening, restoring Venezuelan supply could help stabilize regional energy flows while benefiting American refiners and energy companies.
The policy also strengthens U.S. influence in the Western Hemisphere by limiting involvement from geopolitical rivals such as China and Russia.
A Turning Point in U.S. Venezuela Relations
The decision to allow oil majors back into Venezuela marks a significant turning point after years of confrontation and economic isolation. By combining controlled investment, revenue oversight, and political conditions, the United States is attempting to reshape Venezuela’s energy sector while advancing its own strategic interests.
If successful, the policy could unlock billions of dollars in production, reshape regional energy markets, and create a new partnership between Washington and Caracas after years of tension.
FAM Editor: Note that the U.S. will be controlling all revenues here, to make sure that Venezuela stays under heel. Also, I am wondering if Exxon Mobil and ConocoPhillips will get reimbursed for their losses. More to come…
