The US Treasury Department has relaxed its sanctions on Venezuela’s oil sector, allowing American companies to engage in certain transactions with the country’s state-owned energy firm.
In a general license issued on Wednesday, the Treasury outlined broad exemptions for the US oil sanctions, which had prohibited most trade with Caracas’s state-run oil company, Petróleos de Venezuela SA (PdVSA).
According to the Associated Press, Washington will still “control the cash flow” in such transactions, meaning payments will not go directly to any sanctioned entity in Venezuela and will instead pass through a special US-controlled account. The sanctions also continue to prohibit oil transactions with entities linked to the governments of Iran, Russia, North Korea or Cuba.
The decision comes as the Donald Trump administration attempts to stabilize global oil markets following a major price-spike driven by the US-Israeli bombing campaign on Iran. In retaliation to ongoing airstrikes, Tehran has “effectively closed” the Strait of Hormuz – through which one-fifth of the world oil supply passes each year – to US and allied tankers.
“Passage occurs only with our permission,” Iranian Brig. Gen. Ibrahim Jabari said earlier this month. “Allied ships, such as those from Russia, China, and select partner nations, may transit. Enemy-associated vessels are not allowed to pass, and not a single drop of oil or cubic meter of gas will be permitted through this corridor.”
During a televised interview on Tuesday, Iran’s parliament speaker Mohammad Baqer Qalibaf said the strait could not “return to its previous conditions,” adding that “there is no longer any security” in the region thanks to the US and Israeli bombing raids.
President Trump has demanded that the strait be reopened and urged US allies to help escort vessels through the strategic waterway, warning it would be “very bad for the future of NATO” should they refuse to join the effort. Several European states have been critical of the US strikes on Iran; however, the EU’s top diplomat, Kaja Kallas stating that “Europe has no interest in an open-ended war” earlier this week.
“This is not Europe’s war,” Kallas added.
In addition to easing US sanctions on Venezuela, the Trump administration has also issued a 60-day waiver for the Jones Act in an effort to rein in oil prices. Enacted in the 1920s, the Act requires shippers to use American vessels to transport goods between US ports, but has been “criticized as a form of protectionism” that results in higher prices, according to CNBC.
Venezuela’s longstanding president, Nicolas Maduro, was removed from power in a US military operation earlier this year, and is now held in American custody on dubious drug charges. Though Maduro’s successor, Delcy Rodríguez, has repeatedly condemned the former leader’s “kidnapping,” Trump recently described US-Venezuela ties as “fantastic,” and even suggested the South American country could someday become a US state. Further underscoring the shift in relations, Washington and Caracas also agreed to re-establish diplomatic ties earlier this month.
Will Porter is assistant news editor and book editor at the Libertarian Institute, and a regular contributor at Antiwar.com. Find more of his work at Consortium News and ZeroHedge.
