US eases Venezuela oil sanctions as Trump seeks to boost world oil
supply during Iran war
[March 19, 2026] By
FATIMA HUSSEIN and REGINA GARCIA CANO
WASHINGTON (AP) — U.S. companies will be allowed to do business with
Venezuela's state-owned oil and gas company after the Treasury
Department eased sanctions, with some limitations, on Wednesday as the
Trump administration looks for ways to boost global oil supplies during
the Iran war.
The Treasury issued a broad authorization allowing Petróleos de
Venezuela S.A., or PDVSA, to directly sell Venezuelan oil to U.S.
companies and on global markets, a massive shift after Washington for
years had largely blocked dealings with Venezuela’s government and its
oil sector.
Separately, the White House said President Donald Trump would waive, for
60 days, Jones Act requirements for goods shipped between U.S. ports to
be moved on U.S.-flagged vessels. The 1920s law, designed to protect the
American shipbuilding sector, is often blamed for making gas more
expensive.
The moves highlight the increased pressure that the Republican
administration is under to ease soaring oil prices as the United States,
along with Israel, wages war with Iran. Global oil prices have since
spiked as Iran halted traffic through the narrow Strait of Hormuz,
through which one-fifth of the world’s oil typically passes.
Drivers in the United States are paying the highest pump prices in about
2 1/2 years. The national average for a gallon of regular gasoline
topped $3.84 on Wednesday, according to AAA, compared with $2.98 before
the war began on Feb. 28.
Even before that, voters were worried about higher living costs, and
fuel prices are now adding to concerns for Republicans heading into the
election season with their control of Congress at stake in November.
“Gas prices are up and we know they’re up. And we know that people are
hurting because of it. And we’re doing everything that we can to ensure
that they stay lower,” Vice President JD Vance said at an event in
Auburn Hills, Michigan. “This is a temporary blip.”
Easing sanctions could spur US investment in Venezuela
The Treasury's license is designed to incentivize investment in
Venezuela’s energy sector and is intended to benefit both the U.S. and
Venezuela, while increasing the global oil supply, a Treasury official
told The Associated Press. The official was not authorized to discuss
the matter publicly and spoke on condition of anonymity.
Since the ouster and arrest of Nicolás Maduro as Venezuela's president
during a U.S. military operation in January, Trump has said the U.S.
would effectively “run” Venezuela and sell its oil.
The U.S. license provides targeted relief from sanctions, but does not
lift the penalties altogether. The license allows companies that existed
before Jan. 29, 2025, to buy Venezuelan oil and engage in transactions
that would normally be banned under American sanctions.
But in the short term, there is not likely to be much impact on U.S. gas
prices, said Geoff Ramsey, an expert on Latin America at the Atlantic
Council think tank.
“We’re talking about 12 to 18 months before we see dramatic changes in
Venezuelan output," Ramsey said in an interview.
Easing sanctions and waiving Jones Act requirements normally would have
significant impacts on gas prices, said Claudio Galimberti, Rystad
Energy’s chief economist. “But we are in the most abnormal market I can
remember,” Galimberti said in an interview.
He said he expects hostilities between the U.S., Israel and Iran to last
at least two or three more weeks, and said prices are likely to be high
and volatile until oil and gas traffic resumes through the Strait of
Hormuz. “As long as the strait remains shut, we’re going to have a
crisis,” Galimberti said.
Closer to home, Trump is waiving shipping restrictions
Gas prices in some parts of the country, such as the mid-Atlantic
region, may see some relief from Trump’s waiver of the Jones Act, which
will allow larger ships to move between U.S. ports, said Ramanan
Krishnamoorti, vice president for energy and innovation at the
University of Houston.
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 “Places like Texas and Chicago are
unlikely to feel any change in the price of gasoline and diesel
because of the Jones Act waiver,” Krishnamoorti said. He said some
American shippers may now face more competition from the relaxation
of shipping rules, which could mean higher costs for them.
White House press secretary Karoline Leavitt said the Jones Act
waiver would help “mitigate the short-term disruptions to the oil
market” during the Iran war and would “allow vital resources like
oil, natural gas, fertilizer, and coal to flow freely to U.S.
ports.”
Last week, Trump announced that he would tap the strategic petroleum
reserve, part of a wider agreement with many of the world’s
wealthiest countries to draw oil from emergency stockpiles.
The administration also eased sanctions on certain Russian oil
shipments for 30 days. Next week, Vance and other administration
officials are expected to meet with the main oil industry group, the
American Petroleum Institute, to discuss energy markets and
production, the group's spokesperson Andrea Woods said.
The waiver of the Jones Act rules might only save consumers three or
four cents per gallon, said David Goldwyn, a former Obama-era State
Department special envoy focused on energy
“We’re talking about pennies, Goldwyn said.
All told, the administration's market tweaks will create some
“buffers” for price hikes, at least until late May, Goldwyn said.
The big risk for consumers is if the Hormuz Strait remains closed
beyond that point. “Then the shortfall will increase significantly,"
he said.
Critics are worried about the impact of easing Venezuela
sanctions
The Treasury license is expected to give a massive boost to
Venezuela's oil-dependent economy and help encourage companies that
have been apprehensive to invest. There are some limits. Payments
cannot go directly to sanctioned Venezuelan entities such as PDVSA,
but must be sent instead to a special U.S.-controlled account. In
other words, the U.S. will allow the oil trade but will control the
cash flow.
Additionally, deals involving Russia, Iran, North Korea, Cuba and
some Chinese entities will not be allowed. Transactions involving
Venezuelan debt or bonds will not be allowed. The new license does
not allow payments in gold or cryptocurrency, including the petro,
which was a crypto token issued by the Venezuelan government in
2018.
Venezuela sits atop the world’s largest oil reserves and used them
to power what was once Latin America’s strongest economy. But
corruption, mismanagement and U.S. economic sanctions saw production
steadily decline from the 3.5 million barrels per day pumped in
1999, when Maduro’s mentor, Hugo Chávez, took power, to less than
400,000 barrels per day in 2020.
A year earlier, the Treasury Department under the first Trump
administration locked Venezuela out of world oil markets when it
sanctioned PDVSA as part of a policy punishing Maduro’s government
for corruption. That forced the government to sell its remaining oil
output at a discount — about 40% below market prices — to buyers
such as China. Venezuela even started accepting payments in Russian
rubles, bartered goods or cryptocurrency.
Critics of the acting Venezuelan government argue that the move
rewards Maduro loyalists, while repression, corruption and human
rights abuses continue.
Many public sector workers survive on roughly $160 per month, while
the average private sector employee earned about $237 last year,
when the annual inflation rate soared to 475%, according to
Venezuela’s central bank, and sent the cost of food beyond what many
can afford.
___
Garcia Cano reported from Caracas, Venezuela. Associated Press
writers Seung Min Kim, Michelle L. Price and Matt Daly contributed
to this report.
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