February 03, 2026 | 7 minute read

Hours after the US military strike that ousted Venezuelan President Nicolas Maduro, President Trump announced that, “very large US oil companies, the biggest anywhere in the world” would “go in, spend billions of dollars, fix the badly broken [oil] infrastructure . . . and start making money for the country.” Until last week, however, strict sanctions made any involvement by US companies illegal.[1] The Treasury Department has begun laying the legal groundwork for President Trump’s vision.

On January 29, 2026, Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 46 (GL46), allowing companies to participate in a wide range of activities related to oil originating in Venezuela, including lifting, refining, transporting and selling such oil, so long as such activities are subject to reasonable terms, governed by US law, and subject to enforcement by US courts. And on February 2, OFAC issued General License No. 5U (GL5U), which provides March 20, 2026 as the date of authorization for transactions related to the 2020 8.5 Percent Bond of Petróleos de Venezuela S.A. (PdVSA), the state-owned oil company. 

These licenses present both an incredible opportunity and potential risk for companies looking to transact with Venezuelan oil — while the country has the world’s largest proven reserves, it also has a history of nationalizing foreign assets without just compensation. Below we analyze the existing sanctions scheme, the consequences of these updates and what companies should consider when deciding whether to take up President Trump’s charge.

State of the US Sanctions on Venezuela

The United States first enacted targeted sanctions on Venezuelan individuals and entities in 2005, citing Venezuela’s failure to cooperate with US anti-drug and counter-terrorism efforts. Following, and in reaction to, Maduro’s rise to power in 2013, the United States has imposed greater sanctions, including:

  • Executive Order (E.O.) 13692 (“Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela”) in July 2015, which implemented the Venezuela Defense of Human Rights and Civil Society Act of 2014 and imposed asset blocking and visa restrictions on individuals and entities involved in human rights abuses and corruption.
  • E.O. 13808 (“Imposing Additional Sanctions With Respect to the Situation in Venezuela”) in August 2017, E.O. 13827 (“Taking Additional Steps to Address the Situation in Venezuela”) in March 2018, and E.O. 13835 (“Prohibiting Certain Additional Transactions With Respect to Venezuela”) in May 2018, largely prohibiting financial transactions with Venezuelan government and PdVSA, including those involving digital currency issued by the Venezuelan government and the purchase of Venezuelan debt or its use as collateral.
  • E.O. 13850 (“Blocking Property of Additional Persons Contributing to the Situation in Venezuela”) in November 2018, blocking the assets of and prohibiting certain transactions with any individual or entity operating in designated sectors of the Venezuelan economy or engaging in corrupt transactions with the Venezuelan government. Pursuant to this authority:
  • E.O. 13884 (“Blocking Property of the Government of Venezuela”) in 2019, which was enacted “in light of the continued usurpation of power by Nicolas Maduro” and prohibited US persons from engaging in transactions with the Maduro government, effectively freezing the assets of the Maduro government in the United States. 

Now that Maduro is no longer in power, the “United States is selectively rolling back sanctions to enable the transport  and sale of Venezuelan crude oil products to global markets,” President Trump announced on January 7, 2026. GL46 seeks to deliver on that promise.

OFAC Issues GL46, Allowing Transactions Lifting, Refining, Selling Venezuelan Oil

GL46 (“Authorizing Certain Activities Involving Venezuelan-Origin Oil”) authorizes “established US entities” to enter into previously prohibited transactions with the Government of Venezuela and PdVSA “that are ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil,” arranging shipping and logistics services,[2] and making “commercially reasonable payments in the form of swapping crude oil, diluents, or refined petroleum products.” While GL46 broadly authorizes activities necessary to produce, refine, and export the oil from Venezuela’s vast proven oil reserves, it does not authorize exploration activities.

“Established US entity” is defined as “any entity organized under the laws of the United States or any jurisdiction within the United States on or before January 29, 2025.” But many of these entities, or their employees, will also be within the jurisdiction of the European Union or United Kingdom. While the EU and UK sanctions regimes targeting Venezuela are more limited than the US regime, they are still in force. Thus, in practice, many entities will simply not be able to take advantage of GL46 without breaching UK or EU sanctions to which they remain subject.

There is a chance that the UK and EU may view the US government’s approach — only authorizing its own entities — as narrowly self-serving and be motivated to keep in place their respective sanctions programs. This may prove an area of future international negotiations.

Requirements for Authorized Transactions 

GL46 imposes three requirements for authorized transactions:

  1. US law governs, US courts decide. The contract governing the transaction must include choice-of-law and venue provisions that designate the United States (or a jurisdiction within the United States) as the governing law and venue for any dispute resolution. See GL46(a)(1). For example, a contract that specifies it will be governed by Texas law and that any lawsuit arising from it shall be brought in the federal or state courts within the Southern District of Texas would be authorized.  A contract that is silent on governing law or that includes an arbitration provision naming Caracas as the arbitral seat, however, would not be authorized.  Requiring that all transactions be governed by US law and adjudicated by US courts (or by arbitration within the United States) allows for US oversight of and provides some protection to the US parties involved in these transactions.
  2. Payments made to FGDF. All payments to a blocked person must be made into the Foreign Government Deposit Funds (FGDF), “as specified in Executive Order 14373 of January 9, 2026, or any other account as instructed by the U.S. Department of the Treasury.” See GL46(a)(2). E.O. 14373 (“Safeguarding Venezuelan Oil Revenue for the Good of the American and Venezuelan People”) prohibits the attachment or imposition of any other judicial process against the FGDF, ensuring that the United States will maintain control over Venezuelan oil revenues. President Trump announced that “safeguard[ing] Venezuelan  oil revenue” is necessary to defend American interests and ensure economic and political stability in Venezuela. Maintaining control over these oil revenues also provides leverage and allows the United States to continue to exert control over the Venezuela government.
  3. Reasonable payment terms. The payment terms must be commercially reasonable and must not involve debt swaps, payments in digital currency/tokens issued by the Government of Venezuela, or payments in gold. This requirement serves as an enforcement mechanism for the requirement that payments be made into the FGDF.

These protections were likely included to assuage concerns of companies that got burned when their assets in Venezuela were nationalized in 1976 and 2007, as several have expressed wariness at returning.

Prohibited Transactions

GL46 specifically prohibits transactions that involve: a person or entity located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons or a person located in or organized under the laws of the People’s Republic of China [GL46(b)(2)-(3)]; the unblocking of any property blocked pursuant to Venezuelan Sanctions Regulations, 31 CFR part 59 [GL46(b)(4)]; or a blocked vessel [GL46(b)(5)]. These exclusions reflect the “America first” policy set forth in the White House’s January 9, 2026 Fact Sheet: “President Donald J. Trump Safeguards Venezuelan Oil Revenue for the Good of the American and Venezuelan People,” including reducing Venezuelans’ dependence on and involvement with foreign powers hostile to the United States.

Reporting Requirement for Destinations Outside the United States

In what appears to be a first-of-its-kind reporting requirement, any person that exports, reexports, sells, resells, or otherwise supplies Venezuelan-origin oil to a country other than the United States must send a report, within 10 days of the first transaction (and every 90 days thereafter while the transactions are ongoing) to Sanctions_inbox@state.gov and VZreporting@doe.gov detailing, for each transaction:

  • 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.

Notably, the report must be sent to both the State Department and the Department of Energy.  According to a January 6, 2026 post on X by @WhiteHouse, President Trump asked Energy Secretary Chris Wright to help execute the “plan” for the Venezuelan government to “turn[] over between 30 and 50 MILLION barrels of High Quality, Sanctioned Oil, to the United States of America.” Secretary Wright is thus apparently involved in tracking the barrels of Venezuelan-origin oil that are “returned” to the United States and those that are exported elsewhere.

OFAC Issues GL5U, Delaying Effectiveness of GL5 until March 20, 2026

GL5U further delays until March 20, 2026, the effectiveness of General License 5 (GL5), which authorizes “all transactions related to, the provision of financing for, and other dealings in the Petróleos de Venezuela SA 2020 8.5 Percent Bond that would be prohibited by Subsection 1(a)(iii) of Executive Order 13835.” GL5 was issued to allow bondholders to enforce their rights to the CITGO shares serving as collateral for the PdVSA 2020 8.5 percent bond. While GL5U delays that authorization, OFAC notes that it would have a “favorable licensing policy” and encourages parties to apply for specific licenses to restructure of refinance payments due to the bondholders.

Conclusion

GL46 opens the door for US companies to, as President Trump has urged, go in and “spend billions of dollars” to “fix” Venezuela’s oil infrastructure. But while it certainly opens the country to a variety of long-prohibited opportunities, companies must keep in mind that GL46 covers a limited scope of transactions and those transactions will be monitored by the US government. Those US entities will also need to remain cognizant of restrictions by other jurisdictions to which they are subject. Moreover, additional geopolitical shifts could bring further complexity to operating in the region and industry. For tailored guidance on how these developments may impact your operations, contact Bracewell’s government enforcement and investigations team.

[1] With the exception of historic specific licensed activities by CITGO.

[2] Shipping and logistics services include “chartering vessels, obtaining marine insurance and protection and indemnity (P&I) coverage, and arranging port and terminal services, including with port authorities or terminal operators that are part of the Government of Venezuela.”

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