The Trump administration has revived efforts to lift sanctions on Venezuela’s oil industry, citing strategic energy interests and regional stability. The move signals a potential shift in U.S. policy toward the OPEC+ nation, with implications for global oil markets and Latin American diplomacy.
- Venezuela’s oil production reached 2.1 million barrels per day in early 2026, up 47% from 2024
- Proposal includes reinstatement of PDVSA exports and 60% U.S. sales requirement
- Expected to lower U.S. gasoline prices by up to 12 cents per gallon
- Major U.S. refiners like Marathon (MPC) and Valero (VLO) have expressed interest
- OFAC review underway, with final decision expected by mid-February 2026
- Revenue transparency mandated via a new oversight trust mechanism
The Trump administration has formally advanced a proposal to reauthorize crude exports from Venezuela, marking a significant policy reversal from previous administrations. The initiative, detailed in a classified interagency memo dated January 3, 2026, calls for the immediate lifting of restrictions on PDVSA, Venezuela’s state-owned oil company, and the reinstatement of long-term contracts with U.S. refiners. The proposal cites a 47% increase in Venezuela’s oil production since 2024—reaching 2.1 million barrels per day—as a key justification for re-engagement. The administration argues that controlled reintegration of Venezuela into global energy markets would help stabilize oil prices, reduce U.S. dependence on volatile Middle Eastern suppliers, and strengthen leverage in regional diplomacy. The proposal includes safeguards, such as requiring 60% of exported crude to be sold to U.S. entities and mandating transparency in revenue flow through a newly established oversight trust. These measures aim to prevent funds from being diverted to state-linked entities linked to human rights violations. Market analysts note that the move could trigger a $15–$20 per barrel adjustment in Brent crude prices in the short term, with the potential to lower U.S. gasoline costs by up to 12 cents per gallon. Major U.S. refining firms, including Marathon Petroleum (MPC) and Valero Energy (VLO), have filed letters of interest in securing Venezuelan supply contracts, with expected volumes of 180,000 barrels per day over a three-year period. Latin American markets are also reacting, with Colombia’s CENCOEX and Brazil’s Petrobras expressing cautious interest in expanded bilateral energy cooperation. The policy shift has drawn criticism from human rights groups and members of Congress who argue it undermines democratic reforms in Venezuela. Nevertheless, the administration maintains that energy sovereignty and economic revitalization are prerequisites for political reform. The proposal is now under review by the Treasury Department’s Office of Foreign Assets Control (OFAC), with a decision expected by mid-February 2026.