• The U.S. government is working to soon issue a general license allowing international oil companies to operate in Venezuela's oil and gas sectors, following Venezuela's approval of a new hydrocarbon law on January 30, 2026, which reverses decades of state control by opening the industry to private investors.
  • The licenses would permit extraction, exports, infrastructure investments, and debt repayments, but prohibit direct profits to Nicolas Maduro's government, aiming to boost Venezuelan output by 150,000-200,000 barrels per day amid U.S. refinery needs for heavy oil.
  • Involved firms include Shell (SHEL) and BP (BP), with Shell having received U.S. authorization in October 2025 for the Dragon gas field, and both now seeking licenses for cross-border gas fields shared with Trinidad and Tobago, such as Loran-Manatee and Manakin-Cocuina.

Efforts to restructure Venezuela's energy sector have hit a turning point, with sources familiar with the matter indicating that the U.S. is moving toward granting a general license for oil and gas production in the country. This development comes on the heels of Venezuela's recent hydrocarbon law reform, which paves the way for private investment after years of state dominance. Without such a deal, the industry would continue to languish under sanctions, but the new licenses could inject much-needed capital and expertise.

According to people briefed on the discussions, the licenses are designed to stabilize global energy prices by reintroducing Venezuelan heavy oil to Western markets, already causing a moderate decline in Brent crude due to anticipated supply growth. However, output gains may be limited by Venezuela's equipment wear and field decay, with experts warning of slow export ramps. U.S. refineries, facing shortages of heavy oil, stand to benefit from diversified supplies, though the broader impact hinges on compliance with terms that bar profits from flowing to Maduro's government.

In a shift toward more diplomatic engagement, the U.S. has shown flexibility by tying the licenses to political concessions like transparent elections and prisoner releases, under the interim presidency of Delcy Rodriguez. This follows a period of fluctuating sanctions policy, including the Trump Administration's revocation and renewal of licenses post-Maduro capture. As one source put it, "This is about balancing energy access against regime support, with the goal of gradual infrastructure revival." Attempts to reach Shell and BP for comment were unsuccessful, but industry insiders note both companies are actively pushing for cross-border gas field approvals.

The move aligns with broader trends, such as Trinidad and Tobago's interest in boosting LNG exports via BP and Shell developments, and recent diplomatic thaw highlighted by the U.S. return of the seized supertanker M/T Sophia to Venezuela. Looking ahead, short-term production could rise by 150,000-200,000 barrels per day within a year, offering modest market softening. Long-term prospects depend on Maduro's compliance, with potential for full sanctions lift if elections proceed, accelerating private investment. For now, stakeholders from U.S. refiners to global consumers are watching closely as negotiations unfold.