The US Treasury Department has issued a general license allowing for the provision of goods, technology, software, or American services for the exploration, development, or production of oil and gas in Venezuela.
On October 10, 2023, the U.S. Treasury Department announced a significant decision to issue a general license that allows American companies to supply goods, technology, software, and services for oil and gas exploration and production in Venezuela. This long-awaited permission comes at a time when the U.S. is easing sanctions imposed on Venezuela's energy industry since 2019. The move is seen as part of a strategy to boost the country’s oil production, which has been in a decline and is currently around 1 million barrels per day (bpd).
The easing of restrictions follows the capture of Venezuelan dictator Nicolás Maduro in January 2023 by American forces, which led to Delcy Rodríguez becoming the interim leader of Venezuela. After taking power, Rodríguez quickly moved to secure a $2 billion oil supply agreement with the U.S. This indicates a shift in the political landscape and potential economic recovery for Venezuela, particularly in the oil sector, which has historically been the backbone of its economy.
For oil drilling companies, the new license is crucial as it enables them to use specialized equipment and import necessary platforms to enhance their operations in Venezuela. The U.S. sanctions had previously made it exceedingly difficult for these companies to participate in Venezuela’s oil market. The outcome of this policy change could significantly impact both U.S.-Venezuela relations and the global oil market, as an increase in Venezuelan oil production could alter supply dynamics significantly.
