Newly reimposed U.S. sanctions on Venezuela will not stop the OPEC country’s oil from reaching global markets and could force the government of President Nicolas Maduro to lean more heavily on Iran as Washington renews restrictions.

The new license, General License (GL) No. 44A, issued by the U.S. Office of Foreign Assets Control (OFAC), will complicate Venezuelan oil sales to the global markets but will not stop them, according to Ecoanalitica’s director and economist Asdrubal Oliveros.

"It’s not that we aren’t going to sell oil, Venezuela even in the harshest moments of the sanctions has always been able to sell its oil,” Oliveros said April 18 from Caracas during an interview with popular radio personality Shirley Varnagy.

“The sanctions regime imposes difficulties, restrictions and losses on the dynamics of crude oil sales, and the elimination of the GL 44 can bring back those difficulties,” Oliveros said. Venezuela had managed to sell a good part of its oil without significant discounts under GL 44, which translated into significant additional income, Oliveros said.

Iran is very likely to step up dealings with Venezuela related to gasoline and oil trade amid reimposed U.S. sanctions targeting both countries, analysts say. That means less Venezuelan crude and petroleum will flow to the U.S., which could impact U.S. prices at the pump this summer. Russia, which has in the past engaged in military weapons sales with Caracas, is also likely to up its game again in Venezuela, even under the strains of its ongoing war in Ukraine.

GL 44A, issued on Apr. 17, replaces and supersedes GL 44, which was issued in October by OFAC with an expiration date of April 18. GL 44 authorized transactions in Venezuela spanning the production, lifting, sale and export of oil and gas to the payment of invoices and new investments.

To implement an orderly process following the expiration of GL 44, the U.S. has given companies a 45-day wind-down period through May 31 to comply with the new license, the U.S. Department of State said April 17 on its website.

“OFAC will consider requests for specific licenses to continue activities beyond the end of the wind-down period on a case-by-case basis,” the State Department said.

California-based Chevron Corp., the last U.S. company operating in Venezuela, will not be impacted by GL 44A since the U.S. energy giant will continue to operate under GL 41, which allows for limited natural resource extraction operations in Venezuela.

The company has been allowed to maintain its operations in the Caribbean country as part of U.S. efforts to combat Chinese and Russian influence, especially in the oil and gas industry. Chevron’s continued presence also is a way for Washington to retain a so-called American beachhead in Venezuela, should a regime change bring to power a government more friendly toward the U.S.

RELATED

Is Venezuela the New Iran? Sanctions, Elections Weigh on Oil Powerhouse

For now, oilfield services giants Halliburton, Schlumberger, Baker Hughes and Weatherford will continue to operate in Venezuela, conducting transactions with state-owned Petróleos de Venezuela (PDVSA) necessary for the limited maintenance of essential operations in Venezuela.

Trinidad and Tobago’s Ministry of Energy and Energy Industries stressed that GL 44A doesn’t affect the specific amended OFAC license issued to the twin-island nation in October. The license authorized the National Gas Co. of Trinidad and Tobago Ltd. (NGC), Shell PLC and their affiliates to conduct business with Venezuela and PDVSA with respect to Venezuela’s offshore Dragon gas field.

RELATED

CERAWeek: Trinidad Energy Minister on LNG Restructuring, Venezuelan Gas Supply

For Oliveros, a key part of the U.S. sanctions puzzle relates to Chevron’s operations, as well as those of Italy’s Eni SpA, Spain’s Repsol and France's Maurel & Prom. GL 44A doesn’t impact the operations of the two European companies, which have U.S. approval to carry out oil-for-debt deals in Venezuela.

“We reiterate our commitment to conducting our business in compliance with applicable laws and regulations, both in the US and the countries where we operate,” Chevron told Hart Energy Apr. 19 in an emailed comment.

Eni and Repsol didn't immediately reply to Hart’s emailed requests for comment.

GL 44 was very broad and covered four areas: oil, gold, the financial system and debts, with the most prominent element being the oil issue, Oliveros said.

“For me, GL 41 is more important than GL 44 and GL 41 remains,” Oliveros said. "We went from a broad regime, where GL 44 allowed a large number of activities to be carried out without the dynamics of sanctions, to a more restrictive regime where each company will need to apply for a permit."

Luis Vicente León, the president of the Caracas-based polling company Datanalisis, said the GL 44A could benefit some companies, without providing specifics.

“They are changing from volatile general sanctions for a specific individual sanction which could be better for some companies in Venezuela and could incentivize more investments and increases in production in the future,” León said April 19 from Caracas during an Atlantic Council broadcast over X, formerly Twitter.

Reimposed sanctions on Venezuela will see production remain flat at about 890,000 bbl/d, Rystad Senior Vice President Jorge León wrote in an April 4 research report. That compares to production estimates of 1 MMbbl/d as early as December, rising to 1.12 MMbbl/d by the end of 2025, had GL 44 been extended.

State Department chess move

The State Department said it let GL 44 expire since Maduro and his representatives hadn’t fully fulfilled commitments agreed to under an electoral roadmap agreement, which was signed by the president’s representatives and opposition leaders in the Caribbean island of Barbados in October 2023.

“Despite delivering on some of the commitments made under the Barbados electoral roadmap, we are concerned that Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents and unjustly detained numerous political actors and members of civil society,” the State Department said in an April 17 post on its website.

“We again call on Maduro to allow all candidates and parties to participate in the electoral process and release all political prisoners without restrictions or delay,” the State Department said.

Venezuela’s presidential elections have been set for July 28 by Maduro’s government.

Leading opposition candidate María Corina Machado remains barred from holding public office and running against Maduro. Her hand-picked successor, Corina Yoris, was unable to register her candidacy according to deadlines stipulated in Venezuela.

RELATED

Barred Machado Eyes Venezuela Energy Sector Privatization, Debt Restructuring

Even without Machado, León believes negotiations between the American government and the Venezuelan government will continue as Washington tries to avoid Venezuela sliding closer to a Nicaraguan-styled government.

“We are not talking about competitive elections or non-competitive elections, because competitive elections are not possible right now in Venezuela,” León said. “So, we are talking about different scenarios: semi-competitive elections or non-competitive elections or even no elections at all.”