Prospective Changes to U.S. Venezuela Sanctions Regime Following High Level Energy Sector Meetings

Tomorrow, 9 January, Donald Trump is scheduled to meet with oil executives to discuss investment in Venezuela, following yesterday’s Miami meeting between oil executives and US Energy Secretary Chris Wright.

The US Department of Energy’s fact sheet of yesterday stated that the US government has already begun marketing Venezuelan crude oil in the global marketplace “for the benefit of the United States, Venezuela, and our allies” and that “the world’s leading commodity marketers and key banks” have been engaged to execute and financially support crude oil and crude products sales. Apparently oil sales will begin immediately with the anticipated sale of approximately 30 – 50 million barrels and will continue indefinitely. While little is yet publicly available about what has been agreed, writing on Truth Social, Trump also announced yesterday that Venezuela will be purchasing American made products with the money received from what Trump described as “our new Oil Deal.”

At time of writing, the sanctions legal position remains unchanged in UK/EU, and there has been no OFAC press release on Venezuela since its 31 December targeting of oil traders engaged in sanctions evasion for the Maduro regime. However, the U.S. Department of Energy Fact Sheet announced that the US is “selectively rolling back sanctions to enable the transport and sale of Venezuelan crude and oil products to global markets.” Following days of speculation by lawyers interested in sanctions, it now seems clear that Trump’s plan for Venezuela involves some kind of sanctions rollback. Last month’s update to the Congressional Research Service U.S. sanctions on Venezuela provided an overview of individual, financial and sectoral sanctions on the Venezuelan government, which include asset-freezing (blocking) sanctions. That situation seems likely to change in the very near future, which will generate interesting issues for sanctions lawyers to work through in the coming days and weeks. Clyde & Co colleagues Patrick Murphy, Douglas Maag, Sam Tate, Yolanda McCarthy and Kenna Clarke are keeping a close eye on this evolving situation and will be discussing with our clients what legal issues – and commercial opportunities – may arise as a result.  

If you have any questions, please also speak with Aurelio Fernandez-Concheso, a Partner in our Caracas office.