WASHINGTON (AP) 鈥� U.S. companies will be allowed to do business with after the Treasury Department eased sanctions, with some limitations, on Wednesday as the Trump administration looks for ways to during .
The Treasury issued a broad authorization allowing Petr贸leos 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鈥檚 government and its oil sector.
Separately, the White House said President would waive, for 60 days, 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 as the United States, along with Israel, wages war with Iran. Global oil prices have since spiked as halted traffic through the narrow , through which one-fifth of the world鈥檚 oil typically passes.
Drivers in the United States are paying the 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.
鈥淕as prices are up and we know they鈥檙e up. And we know that people are hurting because of it. And we鈥檙e doing everything that we can to ensure that they stay lower,鈥� Vice President JD Vance said at an event in Auburn Hills, Michigan. 鈥淭his is a temporary blip.鈥�
Easing sanctions could spur US investment in Venezuela
The Treasury’s license is designed to incentivize investment in Venezuela鈥檚 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 Nicol谩s Maduro as Venezuela’s president during in January, Trump has said the U.S. would effectively 鈥渞un鈥� 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.
鈥淲e鈥檙e 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鈥檚 chief economist. 鈥淏ut we are in the most abnormal market I can remember,鈥� 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. 鈥淎s long as the strait remains shut, we鈥檙e going to have a crisis,鈥� 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鈥檚 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.
鈥淧laces like Texas and Chicago are unlikely to feel any change in the price of gasoline and diesel because of the Jones Act waiver,鈥� 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 鈥渕itigate the short-term disruptions to the oil market鈥� during the Iran war and would 鈥渁llow vital resources like oil, natural gas, fertilizer, and coal to flow freely to U.S. ports.鈥�
Last week, Trump announced that he would tap the , part of a many of the world鈥檚 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
鈥淲e鈥檙e talking about pennies, Goldwyn said.
All told, the administration’s market tweaks will create some 鈥渂uffers鈥� 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. 鈥淭hen 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 . 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鈥檚 largest oil reserves and used them to power what was once Latin America鈥檚 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鈥檚 mentor, , 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鈥檚 government for corruption. That forced the government to sell its remaining oil output at a discount 鈥� about 40% below market prices 鈥� to buyers such as China. Venezuela even started , bartered goods or cryptocurrency.
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鈥檚 central bank, and sent the cost of food beyond what many can afford.
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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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