Venezuela has suffered a significant blow with the loss of a crucial U.S. license that enabled the country to export oil globally and attract investment. The absence of this license is expected to impact both the quantity and quality of Venezuela’s crude and fuel sales, leading to an increase in requests for individual U.S. deal authorizations.
The decision to not renew license 44, which had been easing oil sanctions for the past five years, comes as a result of the lack of progress by President Nicolas Maduro’s administration in implementing an electoral roadmap agreed upon last year. As a consequence, the U.S. Treasury has provided a 45-day window for companies to conclude pending transactions, particularly those related to crude and fuel sales, under a more restrictive license.
While the Treasury has committed to processing specific authorization requests for business with Venezuela, it has also made it clear that entering into new business or investment previously authorized under license 44 will not be considered as part of the wind-down activity. This has raised uncertainties about the types of transactions that will be permitted in the future.
Although certain authorizations granted to oil firms such as Chevron, Repsol, and Eni remain unaffected, the situation remains precarious for Venezuela’s oil exports to the United States and Europe.