The Trump administration has re-granted Chevron Corp.'s permission to extract oil in Venezuela, a person close to the matter said.
Full particulars of the decision were not immediately apparent. The move was taken concurrently with Washington and Caracas ironing out an agreement that led to 10 Americans detained in Venezuela being released in exchange for 250 Venezuelans who were jailed in El Salvador being repatriated to Venezuela.
At the heart of the agreement was an assurance that there would be no taxes or royalties to the socialist government of Nicolas Maduro in Venezuela, the person said on condition of anonymity.
Oil futures narrowed some of their previous gains on reports of the administration's action, which fuels the specter of greater supplies coming into a market already at risk of oversupply. Brent crude was just 0.1% for the day at $68.57 a barrel at 1:05 p.m. New York time.
A White House spokesperson did not provide an immediate response to a request. The Wall Street Journal first reported the move.
"Chevron conducts business globally in compliance with local laws and regulations that apply to its business and the sanctions programs available under the U.S. government, including Venezuela," Chevron spokesman Bill Turenne said.
The U.S. revoked Chevron's license to pump oil in Venezuela early this year as part of President Donald Trump's efforts to squeeze the Maduro regime. The decision to ban the firm's operations was a welcome one for national security hardliners in Trump's administration, including Secretary of State Marco Rubio.
The license would allow the Houston-based oil giant to resume production at its Venezuelan facilities, where it had been forced to close plants in May. It would also provide much-needed US dollars to Venezuela's struggling economy.
Chevron's license to operate in Venezuela is now a negotiating tool in negotiations between Maduro and the U.S., and there has been disagreement within the Trump administration. Rubio has spearheaded demands for a hardline, but special envoy Ric Grenell and others have urged a transactional relationship.