The Trump administration has provided a final grace period for companies to complete liquefied petroleum gas (LPG) shipments from Venezuela, extending authorisation until September 5 for cargoes loaded before a July 7 deadline.

The US Treasury Department's extension of General Licence 40D permits the unloading of LPG in transactions involving the Venezuelan government, state oil company Petróleos de Venezuela (PDVSA), or any entity where the state firm holds at least 50% control, Infobae reported. The licence requires that shipments be loaded onto vessels by July 7.

This represents the latest phase in the Trump administration's tightening of energy sanctions on Venezuela, following the expiration of broader oil licences at the end of May. The LPG authorisation, first granted in July 2021 and renewed in 2022 and 2023, had been relaxed under the Biden administration after Trump's initial presidency banned such transactions through a November 2018 executive order.

The current licence maintains restrictions on in-kind payments for oil or petroleum products and prohibits transactions with blocked individuals outside PDVSA or its subsidiaries.

State Department spokeswoman Tammy Bruce has said the US president ordered Secretary of State Marco Rubio to axe all Biden-era oil licences that "benefited the Maduro regime." The Biden administration granted export waivers in November 2022 in a bid to promote dialogue between the Venezuelan government and opposition regarding presidential elections.

That strategy ultimately failed, as the July 28, 2024 elections, which President Nicolas Maduro claims to have won, are widely regarded as fraudulent. The regime has since further cracked down on dissent, with former presidential candidate Edmundo Gonzalez now exiled in Spain and opposition leader Maria Corina Machado forced into hiding.

The LPG trade carries particular significance for Venezuela’s domestic energy supply. According to Guacamaya, despite holding over 220 trillion cubic feet (6.23 trillion cubic metres) of gas reserves, the country's production barely meets internal demand. Caracas has imported the propane and butane mixture for years to supply both household consumption and thermoelectric power plants, with no plans to export gas until at least 2027.

Meanwhile, the sanctions squeeze has prompted Venezuela to rapidly restructure its oil export patterns, with the country shipping 844,000 barrels per day of crude and fuel in June — an 8% increase from May — as it compensated for lost Western markets through expanded sales to China, according to internal documents cited by Reuters.

Following Washington's termination of licences for PDVSA partners including Chevron and Repsol in late May, the state oil company has pivoted towards Asian markets. Some 90% of June exports flowed to China either directly or through trans-shipment hubs, compared with 75% the previous month.

The shift has been facilitated through obscure intermediaries that arrange deals with independent Chinese refiners, according to internal PDVSA documents. This includes shipments of Boscan heavy crude, previously exported by Chevron to US refineries, which is now being sent to Asia for asphalt production.

The increased export volumes — carried by 27 tankers departing Venezuelan waters in June — suggest PDVSA has successfully maintained revenue streams despite Western sanctions. The company had stockpiled imported refined products ahead of the licence cancellations, requiring no diluent imports during the month whilst sustaining output at key fields including Boscan, one of the country's largest.