OFAC Lets Venezuela LPG Offloading License 40D Expire

The one permission that still let liquefied petroleum gas reach Venezuela's ports under U.S. sanctions ran out on Friday. General License 40D, the Treasury authorization covering the offloading of LPG cargoes in Venezuela, hit its stated expiration date of September 5 and was not renewed. With it went the only clean legal path for foreign shippers to deliver the propane and butane that most Venezuelan households burn to cook.

The lapse was not a surprise. When the Office of Foreign Assets Control published GL 40D on July 7, it wrote in the shorter window itself. The license authorized the unloading and delivery of LPG in Venezuela only for cargoes already loaded on a vessel on or before July 7, and only through September 5. That is a two-month tail, not a fresh year of relief. Every prior version of this license had run for roughly twelve months. GL 40D ran for about two.

What the license actually did

GL 40D covered the transactions ordinarily incident and necessary to deliver and offload liquefied petroleum gas in Venezuela, including dealings with the Government of Venezuela and with Petroleos de Venezuela, S.A. (PdVSA) or any entity PdVSA owns 50 percent or more of. Without that carve-out, a routine LPG discharge at a Venezuelan terminal would touch a sanctioned counterparty and expose the carrier, the insurer, and the trader to secondary sanctions. The license made the difference between a legal delivery and a blocked one.

It replaced GL 40C, which OFAC had let expire on July 8. In the past, the agency issued a successor with a full-year runway and no cargo cutoff. This time it issued a successor built to close. GL 40D allowed the pipeline to drain: cargoes on the water as of July 7 could still be discharged, but no new shipment loaded after that date qualified. By September 5, anything still authorized had long since been unloaded.

Why cooking gas, not crude

Washington has kept LPG relief separate from the rest of the Venezuela oil program for years, and the reason is humanitarian rather than commercial. LPG is not an export earner for Caracas. It is an import the country cannot make enough of at home. Venezuela produces on the order of 20,000 barrels a day of LPG against domestic demand near 55,000 barrels a day, a gap that has widened as gas-processing capacity decayed and power outages damaged extraction wells. Output was above 100,000 barrels a day a decade ago.

That shortfall lands directly on kitchens. Roughly nine in ten Venezuelan households cook with LPG delivered in steel cylinders, the bombonas sold in 10, 18 and 43-kilogram sizes, rather than piped natural gas. Direct methane service reaches only a small slice of homes. PDVSA Gas, the PdVSA subsidiary that controls domestic distribution, has struggled for years to keep cylinders filled, and imports were the pressure valve. Removing the import authorization removes the valve.

Part of a wider squeeze

The expiration fits a pattern the Trump administration set in motion early in 2025. In late February the president announced he was reversing the Chevron authorization his predecessor had granted, and OFAC followed with a wind-down license, GL 41A, ordering the company to unwind its joint-venture activity in Venezuela. Smaller foreign operators got the same treatment. France's Maurel & Prom said its specific license was revoked with a wind-down deadline in late May. The administration also floated 25 percent secondary tariffs on countries buying Venezuelan oil and gas.

The Chevron picture wobbled over the summer, with the White House later easing terms to let the company resume some lifting. The LPG license did not get that reprieve. Where crude policy zig-zagged around a single large U.S. operator, the humanitarian carve-out was simply allowed to run out on schedule. The result is a sanctions perimeter that is tighter around Caracas at the end of the summer than it was at the start.

What shippers and traders face now

With no active general license, any party that wants to keep moving LPG into Venezuela has to go to OFAC for a specific license, apply case by case, and wait. That is a slower, narrower channel than a blanket authorization, and it puts the compliance risk back on every link in the chain. Carriers, cargo insurers, and terminal operators that were relying on GL 40D no longer have a general defense to point to. Legal shipments that were routine on September 4 became prohibited on September 6 unless individually blessed.

Compliance advisers had been flagging the expiration date for weeks precisely because of the July 7 loading cutoff. Anyone who wanted product to arrive under the authorization needed it on a vessel before that date and discharged before September 5. Cargoes that missed either mark are now stuck outside the legal channel.

The likely fallout inside Venezuela

The near-term effect will not show up in export statistics. It will show up in supply lines for household gas. Venezuela was already importing LPG to cover its production gap, and the sanctions architecture had left this one door open for exactly that reason. Closing it does not change how much gas the country can produce, and it does not change how many families depend on the bombona. It changes only whether the imports that plug the difference can arrive without a specific U.S. sign-off.

Caracas has said it does not expect to export gas until at least 2027, which underlines how far off any homegrown fix remains. In the meantime, expect longer waits at cylinder-filling points, more reliance on informal and gray-market supply, and pressure on OFAC to consider specific licenses on humanitarian grounds. The agency has treated LPG as a special case before. Whether it does so again, one cargo at a time, is now the open question.

For a program built to pressure a government, the LPG license was always the odd piece, the one aimed at keeping stoves lit rather than starving a treasury. Letting it lapse without a replacement is a signal in itself. Washington has decided the humanitarian exception is no longer worth carving out by default. The people who will notice first are the ones standing in line with an empty cylinder.