Washington | US companies will be allowed to do business with Venezuela's state-owned oil and gas company after the US Treasury Department eased sanctions, with some limitations, on Wednesday as the Trump administration looks for ways to boost world oil supplies during the Iran war.

The Treasury issued a broad authorisation allowing Petróleos de Venezuela SA, or PDVSA, to directly sell Venezuelan oil to US companies and on global markets, a massive shift after Washington for years had largely blocked dealings with Venezuela's government and its oil sector.

The move highlights the increased pressure that the Republican administration is under to ease soaring oil prices as the United States, along with Israel, wages a war with Iran without a foreseeable end date. Global oil prices have since spiked as Iran halted traffic through the narrow Strait of Hormuz, where one-fifth of the world's oil typically passes through from the Persian Gulf to customers worldwide.