U.S. Lifts Sanctions on Venezuelan Oil Sector: A New Era for Energy Investments

The U.S. eased sanctions on Venezuela's energy sector, enabling firms like Chevron and BP to operate in the country. New licenses permit global companies to invest in Venezuelan oil, subject to OFAC approval. The authorization excludes transactions with Russia, Iran, and China, signaling potential growth and regulatory challenges.

The U.S. has made a significant move by easing sanctions on Venezuela's energy sector, opening the door for international oil firms such as Chevron, BP, Eni, Shell, and Repsol to resume operations. The decision, announced Friday, is the most substantial relaxation of restrictions since the removal of President Nicolas Maduro.

Two general licenses were issued by the Treasury's Office of Foreign Assets Control, allowing these global energy giants to engage in oil and gas ventures through existing and new contracts, though payments must pass through U.S.-controlled Foreign Government Deposit Fund. The authorization explicitly prohibits dealings with Russian, Iranian, and Chinese entities.

The move aligns with recent reforms in Venezuela's Hydrocarbons Law, facilitating foreign investments while U.S. Energy Secretary Chris Wright projects billions in oil sales revenue. However, concerns about money routing through Qatar to the interim Venezuelan government have emerged, with potential legal and accountability implications.

(With inputs from agencies.)