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.
“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.
