An executive order signed by President Donald Trump on March 21, 2025, has fundamentally altered the architecture of U.S. economic pressure against Venezuela. The order transfers the authority to unilaterally lift or impose sanctions on Petróleos de Venezuela S.A. (PDVSA), the state-owned oil company, from the Treasury Department’s Office of Foreign Assets Control (OFAC) to Secretary of State Marco Rubio. This move marks a significant departure from decades of sanctions administration rooted in Treasury’s legal framework.
PDVSA produced an average of 800,000 barrels per day in 2024, a steep decline from 2.4 million barrels per day in 2015. The drop illustrates the broader deterioration of Venezuela’s oil industry amid political and economic crisis.
The executive order places the future of those sanctions squarely in the hands of the State Department, raising new questions about how the United States will use economic leverage to pursue diplomatic objectives.
Sanctions Authority Shifts from Treasury to State Department
For years, OFAC administered sanctions under the Venezuela Sanctions Regulations, which were first imposed in 2014 and expanded in 2017 and 2019. Since 2019, those regulations have frozen more than $2 billion in Venezuelan assets, according to the Treasury Department.
Sanctions specifically targeted President Nicolás Maduro and his inner circle, who have been under U.S. sanctions since 2017. The executive order now gives Secretary Rubio unilateral authority over sanctions on PDVSA, a central pillar of Venezuela’s economy. The change does not strip the Treasury Department of all involvement.
Treasury continues to hold the frozen assets, but the State Department now decides whether to impose new sanctions or ease existing restrictions on PDVSA. The executive order does not directly address how this new arrangement will mesh with OFAC’s established legal framework, which has been the backbone of U.S. sanctions policy for decades.
Enforcement questions remain open, particularly regarding consistency with existing regulations and international obligations.
Venezuela’s Political and Economic Context
Venezuela declared independence from Spain in 1811 and became a sovereign state in 1830. After a period of military rule, democratic governments led the nation starting in 1958.
Economic shocks in the 1980s and 1990s caused social unrest and political instability, setting the stage for the election of Hugo Chávez in 1998 and the start of the Bolivarian Revolution. While high oil prices initially funded social welfare programs, poverty rose sharply starting in 2014. International pressure mounted as presidential elections in 2013, 2018, and 2024 faced widespread disputes over their legitimacy.
The United States, Canada, the European Union, and other nations imposed sanctions on government entities and individuals following reports of repression during protests in 2014 and 2017. Those measures targeted officials in the judiciary and the legislature, aiming to link economic pressure to diplomatic outcomes.
Implications for Oil Production and Regional Stability
The production decline at PDVSA — from 2.4 million barrels per day in 2015 to 800,000 in 2024 — underscores the toll that political turmoil and sanctions have taken on Venezuela’s energy sector. The question now is whether Secretary Rubio will use his new unilateral authority to ease restrictions to encourage reforms or to tighten them further in response to continued government actions.
The shift in authority changes how the United States manages its relationship with the Venezuelan government, with direct consequences for the stability of the region and the global oil market. By placing sanctions decisions under the State Department, the executive order aligns economic pressure more closely with diplomatic strategy. But it also introduces new variables into a sanctions regime that has relied on Treasury’s technical expertise and legal infrastructure.
As the world watches, the coming months will reveal how the State Department exercises its newfound power over one of the world’s most heavily sanctioned oil companies.
