OFAC Authorizes Certain Venezuelan Oil Sector Activities Following Venezuelan Reform​

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued two general licenses to provide limited sanctions relief for Venezuela's oil sector after the Venezuelan National Assembly passed sweeping legal reforms.

Venezuela's National Assembly and acting president, Delcy Eloína Rodríguez Gómez, approved on January 29, 2026, a major reform of the country's Hydrocarbons Law, aimed at reversing decades of strict nationalization and opening the oil sector to greater private and foreign participation. This new law seeks to reduce taxes, increase independence for private producers, permit asset transfers and outsourcing arrangements, and introduce independent arbitration for disputes – measures intended to unlock foreign investment and boost production.¹ The reform represents a significant shift in Venezuela's hydrocarbon policy, signaling a more investor-friendly framework that could attract capital, provided the U.S. continues to ease sanctions.²

That same day, OFAC issued Venezuela General License 46 to authorize the sale and export of Venezuelan-origin oil by U.S. companies, subject to certain limitations and conditions. Shortly thereafter, on February 3, 2026, OFAC issued Venezuela General License 47, authorizing certain transactions relating to export, supply and logistics activities involving U.S.-origin diluents to Venezuela. Diluents such as naptha or light crude are necessary to reduce the viscosity of heavy Venezuelan crude, enabling its transportation and production.

OFAC's initial sanctions relief appears to have been timed in connection to Venezuela's legislative reforms, reflecting an initial policy alignment between the U.S. easing of sanctions and Venezuela's domestic legislative changes in the oil sector. In his testimony to the U.S. Senate Committee on Foreign Relations on January 28, 2026, U.S. Secretary of State Marco Rubio stated that "[a]uthorities [in Venezuela] deserve some credit. They have passed a new hydrocarbons law that essentially eliminates many of the restrictions imposed during the Chávez era on private investment in the oil industry."

Authorized Activities

General License 46 and General License 47 authorize certain activities necessary for the immediate export and sale of Venezuelan-origin oil by U.S. entities while maintaining sanctions pressure and leverage over Venezuelan authorities. Specifically:

• General License 46 authorizes all transactions prohibited by the U.S. Venezuela Sanctions Regulations (VSR), including those involving the government of Venezuela³ and Petroleos de Venezuela, S.A. (PdVSA), that are ordinarily incident and necessary to lifting, exportation, re-exportation, sale, resale, supply, storage, marketing, purchase, delivery or transportation of Venezuelan-origin oil, including the refining of such oil, by an established U.S. entity.
• General License 47 authorizes all transactions prohibited by the VSR, including those involving the government of Venezuela and PdVSA, that are ordinarily incident and necessary to the exportation, re-exportation, sale, resale, supply, storage, marketing, delivery or transportation of U.S.-origin diluents to Venezuela.

Limitations and Conditions

Both General License 46 and General License 47 offer limited authorizations, providing the U.S. government with considerable leverage over Venezuela's oil sector for the foreseeable future. Each license includes strict conditions, increasing the due diligence and compliance burden on companies that seek to rely on them when undertaking business in Venezuela. For example:

• Any contract with the government of Venezuela or PdVSA must be governed by U.S. law, with disputes resolved in U.S. courts, venues and/or forums.
• The export and sale of Venezuelan-origin oil is only authorized if undertaken by an "established U.S. entity," meaning any entity organized under U.S. law on or before January 29, 2025 (a year prior to the publication of General License 46).
• Payments to any blocked person for the sale and export of Venezuelan-origin oil under General License 46 must be made into the Foreign Government Deposit Fund (as specified in Executive Order 14373) or any other account as instructed by the Treasury Department.

The licenses exclude certain transactions from the scope of authorized activities, including:

• payment terms that are not "commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela, including the petro"
• any transaction involving persons or entities organized or located in Russia, Iran, North Korea or Cuba or entities owned or controlled, directly or indirectly, by such persons
• the unblocking of any property currently blocked pursuant to the VSR
• any transaction involving a blocked vessel

Furthermore, the authorization for the sale and export of Venezuelan-origin oil in General License 46 does not extend to any transactions involving entities organized or located in Venezuela or the U.S. that are owned or controlled, directly or indirectly, by a person organized or located in China.

Reporting Requirements

Both General Licenses impose reporting requirements to the U.S. Departments of State and Energy, compounding the compliance burdens in an already intricate regulatory environment:

• Under General License 46, any person who exports, re-exports, sells or supplies Venezuelan-origin oil to countries other than the U.S. must provide a detailed report to the Departments of State and Energy, including 1) the parties involved, 2) the quantities, values and countries of ultimate destination, 3) the dates the transactions occurred, and 4) any taxes, fees or other payments provided to the government of Venezuela.
• Under General License 47, any person who exports, re-exports, sells or supplies U.S.-origin diluents to Venezuela must submit a report to the Departments of State and Energy with information regarding 1) the parties involved, 2) the quantities and values, and 3) the dates the transactions occurred.

U.S. persons seeking to rely on OFAC authorizations should also consider the agency's reporting and recordkeeping requirements. Under OFAC regulations, companies must keep full and accurate records of each transaction effected pursuant to an OFAC general license for at least 10 years after the date of the transaction.

Looking Ahead: Challenges Remain

Though Venezuela's reform to its Hydrocarbons Law aims to attract foreign investment by introducing greater autonomy and offering more certainty for dispute resolution, significant questions remain. It is unclear how U.S. sanctions policy will align to support these domestic legislative changes and how the market will perceive them, particularly in the context of disputes involving international investors.

Moreover, this ambiguity extends to the scope of U.S. authorizations. Though General License 46 provides a favorable framework for U.S. companies, uncertainties still abound as to how and to what extent non-U.S. traders, exporters and other oil-market participants can take part in the Venezuelan market or the direct or indirect supply chain associated with the activities contemplated by General License 46. Their involvement may ultimately depend on a case-by-case approach requiring specific licenses or reliance on a combination of general and specific licenses. Similar questions arise under General License 47 for non-U.S. participants supporting transactions involving U.S.-origin diluents to Venezuela, particularly where U.S. jurisdictional touchpoints are present. Read together, General License 46 and General License 47 appear to draw a line between authorizing limited inputs into Venezuela's heavy crude system and keeping tighter control over outputs and monetization.

Notably, banks and financial institutions that participate or service participants in the Venezuelan oil sector face particular challenges due to their roles as gatekeepers for enforcing economic sanctions. They will need to develop enhanced due diligence and compliance processes to validate adherence to General License 46 and General License 47, such as scrutinizing contractual terms, ensuring that payment mechanisms meet U.S. standards for commercial reasonableness and avoiding prohibited payment structures, among others.

Despite this significant policy shift, Venezuela's history of political and legal instability remains a primary concern. Parties seeking to engage in transactions or dealings in reliance of General License 46 or General License 47 should continue to closely monitor developments within the Venezuelan government and watch for potential new sanctions, authorizations or changes to the existing U.S. regime, which are likely to emerge in the coming months.

Holland & Knight's U.S. Export Control and Sanctions Laws Team, Financial Services Regulations Team, International Trade Group and Venezuela Strategic Advisory Team have vast experience with Venezuela and U.S. sanctions laws, including the sanctions administered by OFAC. For guidance on General License 46, the VSR or other matters related to U.S. sanctions, please contact the authors.

Notes

¹ See Id.

² See Id.

³ "Government of Venezuela" includes the state and government of Venezuela, any political subdivision, agency or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (PdVSA), any person owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing, including as a member of the Maduro regime.

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