Political and Energy Dynamics Behind the Transformation of General License 40D

By Misión Verdad – Jul 8, 2025

On July 7, 2025, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury issued General License 40D, within the framework of the illegal sanctions applied to the Venezuelan energy sector.

The new provision, which is part of the 40-series of licenses launched in 2020, introduces a substantial change compared to previous versions.

Unlike previous annual renewals, which were characterized by limited but functional operational continuity, 40D does not constitute a full renewal. Rather than authorizing the general export or re-export of liquefied petroleum gas (LPG), the instrument limits its scope exclusively to transactions necessary to complete the delivery and discharge of cargoes already shipped before July 7, 2025.

In practical terms, License 40D establishes:

Exclusive authorization for the delivery and unloading of LPG previously shipped before July 7, 2025.
Operational validity until September 5, 2025, with no possibility of new charges.
Maintaining the ban on in-kind payments and transactions with blocked entities.
Formal replacement of License 40C, which is revoked upon the entry into force of the new version.

This adjustment does not represent a revocation of the licensing policy, but rather reflects a deliberate restriction, as it is a measure aimed at gradually closing the exception channel that had allowed certain exports to continue under controlled conditions.

In fact, in practice, this adjustment indicates a process of administrative hardening with direct commercial implications for Venezuela and its energy partners, which demonstrates that the focus of attack has always been directed at the export of hydrocarbons.

From its inception, the 40-series license was conceived as a technical mechanism to authorize specific operations within the sanctions regime established by Executive Orders 13850, 13857, and 13884, issued between 2018 and 2019.

These orders blocked Venezuelan state assets in the United States, expanded the definition of “Government of Venezuela” to include Petróleos de Venezuela SA (PDVSA), and prohibited commercial and financial transactions with actors associated with the Venezuelan government.

The licenses, within this scheme, offered limited margins for operations considered essential or humanitarian, such as in this case the export of LPG for domestic use.

Beginning in 2021, OFAC adopted a dynamic of annual technical renewals through licenses 40A, 40B, and 40C, which maintained important restrictions such as the prohibition of in-kind payments or the use of blocked intermediaries, but allowed for a certain stability in the operation of shipments.

The change introduced by 40D breaks with that pattern by restricting new transactions and limiting their effect solely to the conclusion of ongoing operations. While it does not represent a total repeal, it does suggest a reconfiguration of the approach to license administration for Venezuela, with greater political constraints.

This measure is significant given the recent developments in the Venezuelan LPG market. Exports have been consolidated to strategic destinations such as Brazil, Morocco, and Burkina Faso.

In particular, the Brazilian market has represented an export volume more than four times that of the second largest destination, indicating Venezuela’s growing integration into alternative energy corridors.

Furthermore, Venezuelan LPG is valued for its versatility and multi-sector applicability, making it a product with sustained demand in regions with limited energy coverage through conventional grids.

In terms of production, Venezuela maintains installed capacity that allows it to meet its domestic demand without the need to import LPG. The country has consolidated its operational hydrocarbon capacity, and by 2025 will have surpassed the 1 million barrels of oil per day barrier, with sustained growth in natural gas production. This includes LPG as a direct byproduct of hydrocarbon processing.

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Political reading
The modification to the 40-series licensing regime should be interpreted as indirect pressure aimed at limiting the ability to generate export revenue. While maintaining the architecture of the licensing regime, it introduces changes that coincide with internal tensions within the US foreign policy team.

On the one hand, Marco Rubio is pushing for an obsessively tougher stance toward Venezuela, and on the other, the Venezuelan government’s channel of dialogue persists through figures linked to the MAGA wing, such as Richard Grenell, Trump’s special envoy, who has been involved in talks that have allowed, among other things, the resumption of repatriation flights and other exemptions that remain in effect, an indication that dialogue remains open despite contradictory public movements.

Meanwhile, Venezuela continues to consolidate a sustained strategy of market and trade route diversification, while strengthening mechanisms to mitigate the impact of illicit sanctions.

In this context, we do not observe complete revocations of licenses, but rather gradual modifications that respond more to negotiation cycles than to a coherent and predictable policy.

License 40D will reach a new turning point next September. At that time, officials will assess whether the current restrictive trend will continue or, depending on bilateral political developments, whether operating margins should be reopened.

Rather than a definitive measure, the new license modification in question appears to be a transactional piece within a still-active negotiation agenda, in which energy policy operates as a vector of pressure.

(Misión Verdad)

Translation: Orinoco Tribune

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