Caracas Back in Sanctions Doghouse

The United States has reimposed strict sanctions on Venezuela’s oil sector, revoking all licenses granted under the Biden administration. President Donald Trump announced the policy shift, effective March 1, 2025, citing the Venezuelan government’s failure to uphold its commitments under a previous agreement.

“I am hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022,” Trump stated.

He accused the Maduro regime of failing to repatriate Venezuelan migrants who had entered the U.S., saying, “The regime has not been transporting the violent criminals that they sent into our Country (the Good Ole' U.S.A.) back to Venezuela at the rapid pace that they had agreed to.” As a result, he ordered the termination of what he called the “ineffective and unmet Biden 'Concession Agreement.’”

Secretary of State Marco Rubio confirmed the decision, stating, “Today, pursuant to @POTUS directive, I am providing foreign policy guidance to terminate all Biden-era oil and gas licenses that have shamefully bankrolled the illegitimate Maduro regime.”

The move reverses a 2022 decision by the Biden administration that had authorized limited oil transactions in an attempt to incentivize free and fair elections in Venezuela.

In October 2023, following the signing of an electoral roadmap agreement between Maduro’s government and the opposition’s Unitary Platform, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) issued four General Licenses (GLs), suspending select sanctions. These licenses permitted limited trading in oil, gold, and certain Venezuelan sovereign bonds, as well as debt and equity transactions involving state-run oil company PdVSA.

With the reinstated sanctions, Venezuela’s access to international markets is expected to be significantly constrained, dealing a blow to its struggling economy.

The revocation will also impact U.S. energy interests, particularly Chevron, which had been authorized under previous licenses to continue limited operations in Venezuela. Chevron's licence was last renewed on February 1, and remains valid for six months to August

As of now, there has been no official notice regarding gold trading or sales of liquefied petroleum gas (LPG). It remains unclear whether these transactions will continue under specific exemptions or face new restrictions under the latest round of sanctions.

[Update 3/2/25] OFAC has published a frequently asked question (FAQ 1218) regarding the President's February 26 announcement on energy-related authorizations in Venezuela, whic reads in its entirety:

"Treasury is preparing to take action to wind-down General License 41 and other specific licenses as appropriate. We will issue additional guidance to assist implementation concurrent with any changes to the authorization(s)."

[Update 3/4/25 Reuters]

The Trump administration said on Tuesday it was ending a license that the U.S. had granted to oil producer Chevron since 2022 to operate in Venezuela and export its oil, after Washington accused President Nicolas Maduro of not making progress on electoral reforms and migrant returns.