U.S. Government Issues General License Authorizing Transactions Involving Venezuelan Oil

On January 29, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License No. 46 (“GL 46”), authorizing certain activities for U.S. companies seeking to engage in transactions involving Venezuelan-origin oil. The issuance of the general license coincides with Venezuela’s sweeping reform of its oil laws, creating opportunities for foreign investment in the country’s hydrocarbon sector.

While these developments create opportunities for companies looking to enter or expand downstream operations in the Venezuelan oil market, significant sanctions under the Venezuela Sanctions Regulations remain in place that continue to prevent upstream oil-related activities absent a specific license from OFAC. Notably, the Government of Venezuela, Petróleos de Venezuela, S.A. (“PdVSA”) and interim President Delcy Rodriguez remain subject to sanctions.

This client alert provides an overview of activities authorized under GL 46 and identifies key considerations for companies as they examine the risks and opportunities in this space.

GL 46 Authorizations

GL 46 authorizes established U.S. entities to engage in transactions involving Venezuelan-origin oil related to the lifting, exportation, sale, storage, refining, and transportation of such oil. The authorization extends to dealings with the Government of Venezuela, PdVSA, and any entity owned 50 percent or more by PdVSA (“PdVSA Entities”). An “established U.S. entity” is defined as an entity organized under the laws or jurisdiction of the United States on or before January 29, 2025.

GL 46 also permits arranging shipping and logistics services, such as chartering vessels, obtaining marine insurance and arranging port and terminal services, including with port authorities or terminal operators that are part of the Government of Venezuela.  In addition, GL 46 authorizes “commercially reasonable payments” in the form of swaps of crude oil, diluents, or refined petroleum products.

Transactions under this license must meet certain conditions:

• S. law and dispute resolution. Any contract with the Government of Venezuela, PdVSA, or PdVSA Entities must be governed under U.S law and any dispute resolution under the contract must occur in the United States.
• Foreign Government Deposit Funds. Any monetary payment to a blocked person must be deposited into the Foreign Government Deposit Funds, as specified in Executive Order (“E.O.”) 14373, or another account designated by the Treasury Department. E.O. 14373, issued on January 9, 2026, blocks any attachment or other judicial process against Foreign Government Deposit Funds, which consist of the proceeds of Venezuelan oil revenues and diluent sales. U.S. Secretary of State Marco Rubio has confirmed that the Venezuela oil fund, currently containing $200 million, is being held in a short-term account in Qatar and will be transferred to a U.S. Treasury blocked account in the United States.¹https://www.foreign.senate.gov/hearings/us-policy-towards-venezuela Secretary Rubio’s confirmation signals the Trump Administration’s intent to maintain control over Venezuelan oil reserves, consistent with the broader U.S. policy of exercising leverage over the formerly controlled Maduro government.

Importantly, GL 46 does not authorize companies to engage in upstream oil-related activities, such as exploration, drilling, production, or development of Venezuela-origin oil.

Reporting Obligations Under GL 46

The license imposes reporting obligations on any person that exports, reexports, sells, resells, or supplies Venezuelan oil to countries other than the United States. Such persons must submit a detailed report to the U.S. Department of State and U.S. Department of Treasury within 10 days of the first transaction and every 90 days thereafter. These reports must include:

• 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.

Sanctions And Other Restrictions Remain In Place

Despite the issuance of GL 46, sanctions and restrictions on Venezuela broadly remain in place, making it critical for companies to fully understand what is now permitted under U.S. law and what remains prohibited. For example, GL 46 contains significant restrictions and does not authorize:

1. Payment terms that are not “commercially reasonable,” i.e., involving debt swaps or payments in gold, or digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela, including the petro.
2. Transactions involving persons located in or organized under the laws of Russia, Iran, North Korea, or Cuba.
3. Transactions involving Venezuelan or U.S. entities that are owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of China.
4. Transactions involving a blocked vessel.

Implications and Considerations

GL 46 represents a calibrated approach by the Trump Administration to allow for the purchase and sale of Venezuela oil reserves, while continuing to maintain sanctions pressure on the interim Venezuela government. This license appears to advance several U.S. policy objectives simultaneously: (1) reducing Venezuelan dependence on Russian, Chinese, and Iranian actors in its oil sector; (2) providing economic incentives for the Venezuelan government to engage constructively with the United States; and (3) enabling U.S. refiners to access alternative supply sources. The restriction on transactions involving entities “owned or controlled, directly or indirectly” by a person located in or organized under the laws of China is particularly significant given China’s substantial investments in Venezuela’s oil sector. The prohibition on payments involving “digital currency” issued by or on behalf of the Government of Venezuela highlights U.S. government concerns regarding sanctions evasion through digital assets.

Companies considering operations under GL 46 should implement robust compliance programs addressing: (1) counterparty screening to ensure no prohibited nexus with Russia, Iran, North Korea, Cuba, or China; (2) vessel screening to ensure that blocked vessels are not involved in any transaction; and (3) payment mechanism compliance to ensure that all payments flow through approved channels.  

For activities that fall outside of the scope of GL 46, companies should consider proactive engagement with OFAC through the specific licensing process. The Administration’s stated willingness to issue specific licenses suggests a receptive posture toward well-structured proposals that align with U.S. foreign policy objectives.

The Venezuela sanctions landscape remains fluid and requires ongoing monitoring given the dynamic sanctions environment. King & Spalding continues to stay abreast of potential changes that could affect the scope of the authorized activities under GL 46 and, more broadly, investment opportunities available in Venezuela, including but not limited to the oil sector.