Iran and Venezuela strike oil deal amid US sanctions

National Iranian Oil Company (NIOC) and Petróleos de Venezuela (PDVSA) struck the deal that is set to last for six months but could be extended longer_ one person told the outlet.

In the deal_ PDVSA would receive condensate to dilute its oil and NIOC will get shipments of oil to sell to Asia_ the people said.

The Treasury Department told in an email that the trade could violate U.S. sanctions on both countries.

Any "transactions with NIOC by non-U.S. persons are generally subject to secondary sanctions_" the department said.

Treasury would not say directly if the deal between Iran and Venezuela violates sanctions but said the department "retains authority to impose sanctions on any person that is determined to operate in the oil sector of the Venezuelan economy.

A source familiar with the matter told Reuters that the U.S. government has had its eye on the trade for months and that it is considered a likely sanctions violation.

The source also said U.S. officials are concerned the agreement will give Venezuelan President Nicolás Maduro more money going into elections.