Major Shake-Up In Venezuelan Oil Sanctions: New OFAC Authorizations Open Doors — And Heighten Compliance Obligations

On February 2, 2026, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a new Venezuela-related general license, General License 5U (“GL 5U”), which authorizes certain transactions related to the Petróleos de Venezuela, S.A. (“PdVSA”)  2020 8.5 Percent Bond beginning on or after March 20, 2026. GL 5U replaces and supersedes General License 5T and continues OFAC’s incremental recalibration of sanctions that target the Venezuelan oil sector and related financial instruments.

In addition, OFAC simultaneously issued ten new Venezuela-related Frequently Asked Questions (FAQs 1226–1235) addressing the scope and operation of General License 46 (“GL 46”), which authorizes certain activities involving Venezuelan origin oil. These FAQs clarify key definitional, operational, and compliance questions that have arisen since GL 46 was issued on January 29, 2026.

This update follows the firm’s prior alerts analyzing changes to U.S. sanctions policy toward Venezuela and their implications for U.S. and international market participants.

The newly issued GL 5U is narrowly focused on a single financial instrument: the PdVSA 2020 8.5 Percent Bond. OFAC’s action, notwithstanding the prohibitions contained in Executive Order 13835 as amended, confirms that transactions related to the bond, including financings, will be permitted beginning March 20, 2026. Importantly, OFAC reaffirmed that the authorization applies exclusively to this bond and does not extend to other dealings otherwise prohibited under the Venezuela Sanctions Regulations. For parties in transactions involving the 2020 bond, GL 5U provides long awaited clarity on the timeline for permissible activity and offers a structured pathway for compliance going forward.

By contrast, the newly released FAQs 1226–1235 focus on GL 46, which authorizes certain activities involving “Venezuelan origin oil.” OFAC clarified in FAQ 1226 that “Venezuelan origin oil” includes both crude oil and petroleum products extracted, refined, or exported from Venezuela — explicitly encompassing crude blends such as Merey 16, bitumen blends, and refined products including gasoline, asphalt, and petroleum coke. OFAC’s interpretation closely tracks the definition in Executive Order 14245 and incorporates the Energy Information Administration’s technical delineation of petroleum products.

The FAQs further explain, in detail, the range of activities authorized under GL 46. These activities include the lifting, exportation, purchase, sale, and refining of Venezuelan origin oil by an “established U.S. entity,” as well as ancillary conduct such as technical due diligence discussions, inspections, port and maritime coordination, marine insurance procurement, infrastructure repair and maintenance, and financing of cargos or receivables. However, OFAC underscored that GL 46 does not authorize transactions on non-commercial terms, payments in gold or Venezuelan state-issued digital assets, involvement by persons in Russia, Iran, North Korea, or Cuba, participation of certain PRC-affiliated entities, unblocking of property, or transactions involving blocked vessels.

Several FAQs provide important structural limitations. FAQ 1228 confirms that GL 46 does not authorize exploration, drilling, or new investment activities in the Venezuelan oil sector, nor negotiations with PdVSA to develop new concessions. FAQs 1229 and 1230 address who may rely on GL 46, emphasizing that only entities organized under U.S. law on or before January 29, 2025, qualify as “established U.S. entities,” though non- U.S. persons may provide services that are ordinarily incident and necessary to transactions conducted by those entities. FAQ 1231 details prohibited jurisdictions and counterparties, and FAQ 1233 clarifies that the GL 46 dispute resolution requirement — mandating U.S. governing law and U.S. venue — applies only to contracts directly involving the Government of Venezuela, PdVSA, or PdVSA majority owned entities.

Notably, OFAC addressed compliance expectations for financial institutions in FAQ 1234, explaining that banks may rely on customer representations unless they know or have reason to know such statements are inaccurate. FAQ 1235 also confirms that, once a GL 46 authorized transaction fully extinguishes any interest of a blocked party in the oil at issue, the oil may be freely resold or traded downstream, including by non U.S. persons.

The practical effect of these new measures is twofold. First, GL 5U provides a defined, forward looking authorization for a specific Venezuelan sovereign related bond, giving market participants sufficient lead time to structure compliant activity ahead of March 20, 2026. Second, OFAC’s FAQs on GL 46 significantly expand industry understanding of the scope of authorized petroleum related activity while reaffirming firm guardrails, particularly regarding payment structures, counterparties, and the prohibition on non commercial terms. These clarifications will be critical for U.S. energy companies, commodity traders, maritime operators, insurers, and financial institutions navigating the evolving sanctions framework.

In a parallel move to the GL 5U bond authorization and the new GL 46 guidance, OFAC on February 10, 2026 issued General License 30B (“GL 30B”), General License 48 (“GL 48”), and General License 46A  (“GL 46A”), further redefining what is permitted for port and airport operations and for U.S. participation in Venezuela’s oil and gas sector.

GL 30B replaces GL 30A and authorizes transactions ordinarily incident and necessary to the operation or use of ports and airports in Venezuela, including activity that would otherwise be prohibited under Executive Order 13884 (Government of Venezuela) and Executive Order 13850 as applied to the Instituto Nacional de los Espacios Acuaticos (“INEA)” and its majority owned entities. The authorization remains narrow. It does not unblock property, expand dealings with other blocked persons, or override other prohibitions under the Venezuela Sanctions Regulations (“VSR”). Companies relying on port or maritime services in Venezuela should treat GL 30B as a functional safe harbor only for operational necessities and should assess all counterparties and payment flows carefully.

FAQ 1236 explains that GL 30B, removes a key limitation contained in GL 30A by eliminating the prohibition on transactions related to the exportation or re-exportation of diluents to Venezuela. Under GL 30B, authorized transactions continue to include payments ordinarily incident and necessary to the operation or use of ports and airports in Venezuela, including those involving INEA and its majority owned subsidiaries. OFAC further clarified that GL 30B authorizes payment of port fees and customs duties, including those incurred in connection with activities authorized under GLs 46A, 47, and 48.

GL 48 introduces a targeted pathway for U.S. persons to supply goods, technology, software, and services for oil and gas exploration, development, or production in Venezuela, even when the counterparty is the Government of Venezuela or PdVSA. To rely on GL 48, contracts must incorporate U.S. governing law and U.S. dispute resolution, and payments to blocked parties must route through the Foreign Government Deposit Funds created under Executive Order 14373. The authorization extends to routine operational support but remains ring fenced by material limitations, including prohibitions on non commercial terms, gold or Venezuelan state-issued digital assets payments, and dealings involving persons in Russia, Iran, Democratic People’s Republic of Korea (“DPRK”), Cuba, or the People’s Republic of China (“PRC”). GL 48 also carries mandated reporting to State and DOE. Clients considering upstream work should expect strict compliance controls and should engage counsel early to structure contracts and payment mechanisms.

Following its February 10, 2026 actions, OFAC on February 13, 2026 issued General License 49 (“GL 49”) and General License 50 (“GL 50”), further expanding the regulatory framework governing early stage investment activity and operational participation in Venezuela’s oil and gas sector. GL 49 establishes a mechanism for negotiating contingent contracts for potential upstream investment, while GL 50 provides a tailored operational authorization for select multinational energy companies subject to heightened contractual, payment, and reporting safeguards.

GL 49 authorizes U.S. and non U.S. persons to negotiate and enter into contingent contracts for new investment in Venezuela’s oil and gas sector, including with the Government of Venezuela and PdVSA. The license expressly covers “contingent contracts,” defined to include executory contracts, pro forma invoices, bids or proposals in public tenders, binding memoranda of understanding, agreements in principle, or similar arrangements whose performance is expressly contingent upon future OFAC authorization. GL 49 also authorizes prefatory activities, such as commercial, legal, technical, safety, and environmental due diligence assessments. GL 49 extends to contingent contracts for new exploration, development, and production, expansion of existing operations, and formation of new joint ventures or corporate structures in Venezuela. Importantly, GL 49 does not authorize: (1) transactions involving persons or entities located in Russia, Iran, DPRK, Cuba, or the PRC, or entities owned or controlled by them; (2) unblocking of property; or (3) dealings involving blocked vessels. GL 49 therefore functions as a pre-investment safe harbor that allows companies to structure future Venezuelan operations while maintaining clear contractual safeguards consistent with OFAC requirements.

GL 50 authorizes a defined class of oil and gas sector activities in Venezuela when conducted by certain multinational entities listed in the “Annex - Entities Described in Paragraph (a) of General License 50” — including BP, Chevron, Eni, Repsol, and Shell — and their subsidiaries. GL 50 authorizes transactions involving the Government of Venezuela, PdVSA, and PdVSA owned entities, provided that: (1) contracts must specify U.S. governing law and U.S. dispute resolution, and (2) any payment to a blocked party (other than local taxes, fees, or permits) must be routed to the Foreign Government Deposit Funds established under E.O. 14373. Specifically, GL 50 prohibits: (1) noncommercial or abnormal payment terms; (2) debt swap arrangements; (3) payments in gold or Venezuelan state-issued digital assets (including the petro); (4) dealings with Russia, Iran, DPRK, Cuba, or PRC persons; (5) unblocking of property; and (6) any transaction involving a blocked vessel. GL 50 also includes extensive reporting requirements due 10 days after the first transaction and every 90 days thereafter, including identification of counterparties, transaction volumes and values, and payments to the Venezuelan government. GL 50 significantly expands the operational environment for major international energy companies with existing Venezuelan portfolios, but requires heightened compliance controls due to its intricate contract, payment, and reporting obligations.

GL 46A supersedes GL 46 and preserves — while refining — the framework for “established U.S. entities” (organized under U.S. law on or before January 29, 2025) to engage in a wide spectrum of activity involving Venezuelan origin oil, including lifting, transportation, storage, sales, and refining. GL 46A maintains the same contract and payment requirements as GL 48 and confirms authorization for commercially reasonable swaps of crude, diluents, or refined products. As with GL 48, GL 46A excludes non commercial terms, gold or Venezuelan state-issued digital assets, dealings with Russia, Iran, DPRK, or Cuba, and transactions involving Venezuela or U.S.-based entities owned or controlled by PRC persons. The license also triggers reporting obligations for shipments to destinations other than the United States. Clients evaluating crude lifts or downstream transactions should view GL 46A as a highly structured but usable framework — one that requires careful counterparty diligence, contract drafting, and documentation.

FAQ 1237 confirms that GLs 46A and 48 permit routine payments of local taxes, permits, and fees to the Government of Venezuela or its instrumentalities when such payments are ordinarily incident and necessary to authorized oil or gas sector activities. However, OFAC emphasized that other payments, as required under Executive Order 14373, — such as royalties, fixed per barrel production levies, or federal taxes owed to blocked persons (including the Government of Venezuela or PdVSA) — must be routed into the Foreign Government Deposit Funds or into another account designated by the U.S. Department of the Treasury.

OFAC has further clarified in FAQ 1238 that it would apply a favorable licensing policy to specific license applications seeking authorization for the resale of Venezuelan origin oil for use in Cuba. To qualify, transactions must be consistent with the terms and conditions of GL 46A, though applicants do not need to be established U.S. entities, and Cuba related limitations in GL 46A do not apply. This policy extends only to transactions that support the Cuban people, including the Cuban private sector. Transactions benefiting Cuban military, intelligence, or other restricted entities remain prohibited.

As OFAC continues to recalibrate its Venezuela sanctions program, companies engaged in oil trading, maritime services, energy finance, logistics, and upstream or downstream energy operations should closely review GL 5U, GL 30B, GL 48, GL 49, GL 50 and GL 46A, and assess whether their current or contemplated activities fall within these evolving authorizations. The new licenses expand potential opportunities but introduce equally significant contractual, payment, counterparty, and reporting requirements. Given the complexity and rapid pace of developments, updating internal compliance controls and seeking proactive legal guidance remains essential to reducing regulatory and operational risk.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.