U.S. Treasury Authorizes Venezuelan Oil Deals Under Strict Conditions

In the first relaxation of sanctions broadly prohibiting dealings with the Government of Venezuela, the Office of Foreign Assets Control (OFAC) issued General License 46 (the GL) on January 29, 2026, authorizing petroleum production and sales activity in Venezuela, contingent on several conditions.

With important limitations, the GL authorizes an established U.S. entity—defined as a company organized under U.S. law on or before January 29, 2025—to engage in transactions “ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil.”

The GL’s Role in Implementing Executive Order 14373

The GL partially implements Executive Order 14373, issued on January 9, 2026, which restricts attachment and other recovery claims based on proceeds from sale of Venezuelan oil and other natural resources. The executive order applies to “Foreign Government Deposit Funds,” defined as funds paid to or held by the U.S. government—either in designated Treasury accounts or funds “on behalf of the Government of Venezuela,” including the Central Bank of Venezuela and Petrόleos de Venezuela, S.A. (PdVSA)—that are the proceeds from the sale of natural resources from Venezuela, or the sale of diluents to the Government of Venezuela. The reference to funds held “on behalf of” the Government of Venezuela is intended to extend the order’s protections to oil-sale proceeds that are permitted to be held in non-U.S. accounts of third countries, such as Qatar.

Although the order specifies that the Government of Venezuela has title to Foreign Government Deposit Funds, it also provides that any disbursement or transfer of those funds is subject to the instructions of the U.S. Secretary of State.

Prior to the GL, the order’s protections appeared redundant, as blocking sanctions against the Government of Venezuela already seemed to provide the same protections. The GL makes clear that those protections were designed to anticipate the subsequent easing of restrictions.

What to Know about the GL

• The GL authorizes transactions such as arranging shipping and logistics services, including chartering vessels, obtaining marine insurance and protection and indemnity (P&I) coverage; and arranging port and terminal services, including with port authorities or terminal operators that are part of the Government of Venezuela.
• Commercially reasonable payments in the form of swaps of crude oil, diluents, or refined petroleum products are authorized.
• The GL imposes the following conditions:
• Contracts with the Government of Venezuela, PdVSA or PdVSA-controlled entities must specify that U.S. law governs and that dispute resolution occurs in the U.S.
• Any payments to Venezuelan sanctioned parties—including the Government of Venezuela, PdVSA and other government-controlled entities—must be made into the Foreign Government Deposit Funds or any other account as instructed by the U.S. Treasury Department. Guidance from the Treasury is required as to how to make payments into these accounts.
• The GL specifically excludes from its authorization:
• Transactions involving certain payment terms (i.e., terms that are not commercially reasonable; debt swaps; payments in gold; payments in digital currency, digital coin or digital tokens issued by, for, or on behalf of the Government of Venezuela).
• Transactions involving persons located or organized in Russia, Iran, North Korea or Cuba, or entities owned or controlled by, or in a joint venture with, any such persons.
• Transactions involving any U.S. or Venezuelan entities that are owned, controlled by or in a joint venture with a Chinese entity.
• Unblocking of any property blocked pursuant to OFAC sanctions.
• Transactions involving sanctioned vessels.
• Any person that exports, reexports, sells, resells or supplies Venezuelan-origin oil to countries other than the United States must file a report with OFAC that includes details about the parties involved; the quantities, values and countries of ultimate destination; the dates the transactions occurred; and any taxes, fees or other payments provided to the Government of Venezuela.

Looking Ahead

Although it remains to be seen whether the Government of Venezuela and PdVSA will sell oil on the terms in the GL, the license is the first step by the Trump administration to relax U.S. sanctions on Venezuela and open the country to new investment. 

Orrick’s International Trade & Investment team will continue to monitor and provide updates on the evolving U.S. sanctions framework for Venezuela.  Please contact the authors with questions about compliance with Venezuela sanctions.