Oil Trade Opens: U. S. , Venezuela, and the Price Game

The United States has relaxed some rules that once stopped its companies from buying Venezuelan oil. This change comes as global prices climb after Iran stopped shipping through the Strait of Hormuz, a key route for oil. The move is meant to boost supply and give U. S. firms a chance to invest in Venezuela’s energy sector, though it does not remove all restrictions. The new permission lets U. S. businesses purchase oil directly from Venezuela’s state company, PDVSA, and sell it worldwide. However, the Treasury still controls how money moves, requiring payments to go through a U. S. -managed account. Deals that involve Russia, Iran, Cuba or certain Chinese firms are still barred, and transactions in gold or cryptocurrency are not allowed. In addition to easing sanctions on Venezuela, the administration has temporarily lifted the Jones Act for 60 days. This law normally forces goods shipped between U. S. ports to use American‑flagged ships, a rule that many say keeps gas prices high. The waiver is expected to help some regions, like the mid‑Atlantic, but experts say the savings for consumers will be small—just a few cents per gallon.

Oil prices in the United States have reached levels not seen in two and a half years. The average price for a gallon of regular gasoline jumped from about $2. 98 before the Iran conflict to over $3. 84 in recent weeks, according to AAA data. Politicians claim the new policies will keep prices from rising further, but analysts warn that the real impact may take a year or more to materialize. Venezuela’s oil output has fallen dramatically over the past two decades. From a peak of 3. 5 million barrels per day in 1999, production has dropped to less than 400, 000 barrels today. Corruption, mismanagement and long‑standing U. S. sanctions have all contributed to this decline. The recent license could help the country regain some economic stability, but critics argue it may also reward those who support a repressive regime. The administration’s actions are part of a broader strategy to counter supply disruptions caused by the U. S. and Israel’s conflict with Iran. By tapping emergency oil reserves and easing restrictions on certain Russian shipments, the government hopes to cushion consumers against sharp price swings. Still, if the Strait of Hormuz stays closed beyond early May, prices could rise sharply again.

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