OFAC Issues General License 46, Authorizing Certain Activities Involving Venezuelan-Origin Oil

Key Points

• On January 29, 2026, the U.S. Department of the Treasury’s OFAC issued GL 46 to authorize a range of operations related to Venezuelan-origin oil otherwise prohibited under U.S. sanctions, including transactions with GoV, state-owned oil company PdVSA or PdVSA Entities, all of which are blocked.
• In the aftermath of a January 3, 2026 U.S. military and law enforcement operation that resulted in the capture and indictment of Venezuela’s so-called president, Nicolas Maduro, GL 46 is a significant step in the Trump administration’s effort to stabilize Venezuela’s economy under its newly led government.
• Under Maduro, Venezuela faced years of U.S. economic pressure through heavy sanctions and, more recently, a quarantine of “shadow fleet” vessels transporting oil, the Venezuelan government’s chief source of revenue.
• However, GL 46 does not alter the overall framework for U.S. sanctions. Instead, it focuses on certain oil sector operations, and calibrates sanctions relief through multiple conditions and exclusions, including by restricting payment channels, limiting application of the GL’s authorizations to certain U.S. entities, and excluding entities with certain affiliations to specified countries.
• GL 46 does not explicitly authorize investment in upstream oil production or exploration, nor does it authorize the supply of diluents and refined petroleum products other than as payment for oil in the form of swaps, or activities related to gas, critical minerals, or other sectors of the Venezuelan economy. However, yesterday, OFAC issued GL 47, which authorizes certain activities related to the sale of U.S.-origin diluents to Venezuela. We will discuss GL 47 in a subsequent client alert.
• This scoping of GL 46 is consistent with the Trump administration’s objectives of: (i) preserving leverage to promote continued bilateral cooperation by Venezuela’s government under Interim President Delcy Rodriguez, (ii) reducing or eliminating the influence of U.S. adversaries and rivals in Venezuela and (iii) benefiting U.S. economic interests.
• However, given President Trump’s focus on rebuilding Venezuela’s energy sector, additional general licenses may be forthcoming, as reported in the press.

Overview of GL 46

Scope of Authorization

Subject to conditions and exceptions, General License (GL) 46 authorizes—without any time limitation—all transactions that are ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery or transportation of Venezuelan-origin oil, including the refining of such oil, by an “established U.S. entity.” GL 46 clarifies that this authorization covers certain transactions related to the maritime transport of Venezuelan oil as well as “commercially reasonable” payments in the form of swaps of crude oil, diluents or refined petroleum products.

Although GL 46 authorizes transactions ordinarily incident and necessary to a range of activities in Venezuela’s oil sector, the authorization applies only to such transactions “by an established U.S. entity,” i.e., an entity organized under the laws of the United States or any jurisdiction within the United States on or before January 29, 2025 (one year prior to the date of issuance of GL 46).

Conditions

The authorization requires that any contract with the government of Venezuala (GoV), Petróleos de Venezuela, S.A. (PdVSA) or entities majority-owned by PdVSA (PdVSA Entities) for covered transactions must specify that it is governed by U.S. law, and any dispute resolution under such contract must occur in the United States.

Further, any monetary payment to a blocked person must be made into the “Foreign Government Deposit Funds” (i.e., special U.S. Department of the Treasury accounts previously identified in Executive Order (E.O.) 14373 issued by President Trump on January 9, 2026) or another account as instructed by the U.S. Department of the Treasury.

Exclusions

The authorization excludes any transaction involving:

• An individual or entity located in or legally organized under the laws of Russia, Iran, North Korea or Cuba, or certain affiliated entities, including any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such individuals and entities.
• An entity located in or organized under the laws of Venezuela or the United States that is owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of the People’s Republic of China.
• A blocked vessel.

Further, GL 46 does not authorize:

• Payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital coin or digital tokens issued by, for or on behalf of GoV, including the petro.
• The unblocking of any property blocked pursuant to the Venezuela sanctions program.

Reporting Obligation

GL 46 requires any person that exports, reexports, sells, resells or supplies Venezuelan-origin oil to non-U.S. destinations to provide a detailed report to the U.S. State Department and the U.S. Energy Department that includes specified information for each transaction. The first report is due 10 days after execution of the initial covered transaction, with subsequent reports required every 90 days while such activity continues.

Analysis of Key Issues

Scope of Authorized Transactions

GL 46 does not address whether certain complex, ancillary transactions fall within the authorization (e.g., hedging arrangements, financing structures and multijurisdictional logistics services). This creates uncertainty for companies seeking to structure transactions that rely on such commercial support services.

Definition of “Oil”

GL 46 does not define the term “oil” for purposes of the authorization, and the Office of Foreign Assets Control (OFAC) has not yet issued public guidance doing so. Notably, in guidance related to Venezuela GL 40C, OFAC has referred to the U.S. Energy Information Administration (EIA) “Glossary” for the definition of another energy sector term (see Frequently Asked Question 915 in relation to the definition of the term “liquefied petroleum gas”). In the event OFAC takes a similar approach for GL 46, the EIA Glossary defines “oil” as “a mixture of hydrocarbons usually existing in the liquid state in natural underground pools or reservoirs.” Whether OFAC will adopt the EIA Glossary’s definition of “oil” for purposes of GL 46, or will instead provide a different definition, remains to be seen.

Applicability to Non-U.S. Parties

On its face, the language of the authorization in GL 46 appears to allow room for transactions involving participants that do not meet the definition of an “established U.S. entity”—including certain non-U.S. entities—to the extent that such transactions are “ordinarily incident and necessary” to the specified Venezuelan oil-related transactions “by an established U.S. entity.” This interpretation is supported by the inclusion of a reporting requirement for persons providing Venezuelan oil to countries other than the United States, which for practical purposes would appear to require the involvement of non-U.S. persons. However, determining whether a transaction meets this threshold will depend on its specific facts and circumstances.

U.S. Governing Law & Dispute Resolution

Based on the express language in GL 46, it is unclear whether the governing-law and dispute-resolution requirements apply to any underlying agreement supporting the authorized dealings or only to agreements entered into between the relevant “established U.S. entity” and the GoV, PdVSA or PdVSA Entities.

• The scope of these requirements appears to be broad and creates operational considerations for parties negotiating with GoV-linked entities, particularly in a market where counterparties traditionally rely on local law, neutral arbitration venues or state-controlled adjudicatory processes.
• The lack of clarity on how OFAC expects these requirements to apply to non-contractual arrangements (e.g., port authorizations) further complicates compliance planning.
• For contracts covered by GL 46, the requirement that “any dispute resolution under the contract occur in the United States” encompasses both litigation and international arbitration seated in the United States. The latter offers recourse to the New York Convention for the global enforcement of arbitral awards.
• “Established U.S. entities” investing in Venezuela should consider the absence of an investment treaty between the United States and Venezuela, which makes strategic planning advisable.

Monetary Payment Routing Requirement

OFAC has not yet published guidance identifying how to make authorized monetary payments for Venezuelan oil into the Foreign Government Deposit Accounts or other Department of the Treasury-designated accounts, and which accounts apply in different circumstances. Until such guidance is issued, it is unclear how parties will be able to engage in transactions authorized by GL 46 given the requirement to route monetary payments—which would otherwise be paid directly to Venezuelan counterparties, such as PdVSA or PdVSA Entities—into these accounts.

Commercially Reasonable Payments

While GL 46 authorizes commercially reasonable payments through certain in-kind swaps and excludes payment terms that are not “commercially reasonable,” it provides no guidance on whether payments executed at non-market prices are per se impermissible or which pricing benchmarks should apply. These gaps create significant compliance risk for pricing structures that diverge from established benchmarks.

U.S. Policy Considerations and Risks

In the context of other U.S. actions and statements since Maduro’s removal from power, GL 46 reflects the Trump administration’s phased approach towards sanctions relief. By initially opening up the supply chain for oil that has accumulated in quantities at the limit of Venezuela’s storage capacity, GL 46 could facilitate payments that are vital to supporting GoV functions and the basic needs of the Venezuelan people. This is consistent with Secretary of State Marco Rubio’s testimony that the preliminary phase will focus on economic stabilization, followed by an eventual transition to broader economic recovery and rebuilding.

Companies seeking to engage in authorized transactions should bear in mind that the longevity of GL 46—which does not expire but could be revoked at any time—and the implementation of further sanctions relief will heavily depend on GoV’s continued cooperation in advancing U.S. policy priorities. Among other steps taken prior to GL 46’s issuance, GoV approved significant reforms to its hydrocarbons framework, which U.S. oil companies have identified as a prerequisite to investing in Venezuela’s oil sector. Although President Trump and senior officials have emphasized the goal of accelerating the restoration of Venezuela’s infrastructure for upstream oil exploration and production, GL 46 does not explicitly authorize investments relevant to such activity.

Additionally, companies considering business in Venezuela now or in the future should be aware of other U.S. policy objectives that appear to be reflected in GL 46. For example, although the Trump administration has stated that it will not prevent China from purchasing Venezuelan oil at market prices, the exclusion of U.S. or Venezuelan entities owned or controlled by persons located or organized in China—coupled with the requirement for involvement by an “established U.S. entity”—appears aimed at reducing Chinese participation in the supply chain. The additional requirement in GL 46 that persons delivering oil to non-U.S. countries provide detailed, retroactive reports suggests the Trump administration has a broader concern about the destination of these oil shipments and the related influence of other jurisdictions on Venezuela’s economy.