Venezuela oil sector hit by loss of its widest US license

Reuters:  Venezuela's loss of a key U.S. license that allowed it to export oil to markets around the world and secure investment is expected to hit the volume and quality of its crude and fuel sales while prompting a flurry of requests for individual U.S deal authorizations.

U.S. officials had warned that absent progress by President Nicolas Maduro's administration on implementing an electoral roadmap agreed last year, the U.S. would not renew license 44, which since October has eased oil sanctions in place for the last five years.

On Wednesday, the Treasury gave companies 45 days to wind down pending transactions, particularly crude and fuel sales, through a more restrictive license.

It also said it would process specific authorization requests for business with Venezuela, a commitment Venezuelan officials said they expect the U.S. to honor. Many companies have waited for years to have energy deals involving Venezuela approved by Washington.

But the Treasury also explained that "entering into new business, including new investment that was previously authorized under license 44, will not be considered wind-down activity," casting doubts on what type of transactions will be allowed.

Authorizations previously granted to oil firms including Chevron, Repsol and Eni were not withdrawn, which secures Venezuela's oil flows to the United States and Europe.