"They're the financial equivalent of kinetic strikes," Treasury Secretary Scott Bessent said, warning banks in China, Hong Kong, the UAE and Oman they could face secondary sanctions for doing business with Iranian entities. At the same time, the White House granted a 60-day Jones Act waiver and the Treasury issued a license allowing limited Venezuelan oil sales to flow under strict U.S.-controlled financial conditions.

Treasury warns banks: secondary sanctions on the table

The Treasury Department has put financial institutions in China, Hong Kong, the United Arab Emirates and Oman on notice that Washington may impose secondary sanctions for doing business with Iranian entities, Treasury Secretary Scott Bessent said at a White House briefing. Bessent described the planned measures as the “financial equivalent” of kinetic strikes — language signaling a tougher, nonmilitary line aimed at cutting off cash that helps Iran sustain its war effort.

Those warnings were not framed as abstract threats. Bessent told reporters the administration has warned countries and companies that buying Iranian oil or hosting Iranian funds in local banks could trigger penalties. The move would extend the risk of sanctions beyond Iranian entities to third parties that help Iranian trade and finance.

Secondary sanctions target foreign firms and banks that deal with sanctioned Iranian persons or vessels. They can bar intermediaries from U.S. markets or block access to dollar clearing, forcing governments and large banks to choose between commercial ties with Iran or preserving access to U.S. finance.

Opening a trade door with Venezuela — but on U.S. terms

At the same time, the administration relaxed long-standing restrictions on Venezuela’s oil sector. The Treasury issued a broad license allowing Petróleos de Venezuela S.A. (PDVSA) to sell oil directly to U.S. companies and to global markets, and President Donald Trump waived Jones Act requirements for 60 days, temporarily allowing non-U.S.-flagged ships to move goods between U.S. ports.

The license includes several clear limits:

  • Payments from Venezuelan oil sales cannot go directly to sanctioned Venezuelan entities such as PDVSA and must be routed into a U.S.-controlled account.
  • Transactions involving Russian, Iranian, North Korean and Cuban parties are excluded, and certain Chinese entities are barred.
  • The license prohibits transactions in Venezuelan debt or bonds and restricts eligibility to companies that existed before Jan. 29, 2025.

Officials said the step is designed to attract investment into Venezuela’s energy sector and lift more crude onto world markets while maintaining tight control over financial flows to Caracas.

Why the twin approach landed now

The timing reflects linked policy goals. Global oil prices rose after Iran halted traffic through the Strait of Hormuz, a disruption that pushed U.S. pump prices higher and created political pressure for a near-term supply fix. The administration’s strategy pairs a short-term move to increase oil supply with intensified financial pressure on Iran.

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The Jones Act waiver lasts 60 days — a short window for U.S. firms to move Venezuelan crude while the Treasury warns that foreign banks handling Iranian funds could face secondary sanctions.

This article was created with AI assistance.