President Trump announced his intention to revoke Chevron Corporation’s license to operate in Venezuela, jeopardizing the country’s fragile economic recovery. This decision, announced on social media, aims to reverse the Biden administration’s 2022 concession agreement that permitted Chevron to produce and sell Venezuelan oil despite sanctions against the Maduro regime.
Trump cited Venezuela’s electoral conditions and its failure to repatriate migrants to the US as justification for the revocation. The move signifies an escalation of US sanctions against Venezuela following Maduro’s contested re-election and subsequent crackdown on political opponents. The decision targets Venezuela’s economy at a time when public sentiment is already low, with polls indicating widespread frustration and disappointment following Maduro’s recent inauguration.
Secretary of State Marco Rubio echoed Trump’s stance, vowing to provide foreign policy guidance to terminate all Biden-era oil and gas licenses that have financially supported the Maduro government. This coordinated effort signals a significant shift in US policy towards Venezuela.
Venezuelan officials condemned Trump’s decision. Vice President and Oil Minister Delcy Rodriguez criticized the move as harmful and inexplicable, arguing that it damages the US and its companies more than the Venezuelan people. This response highlights the potential for further diplomatic tensions between the two countries.
Chevron, the last remaining US oil major in Venezuela, plays a crucial role in the country’s economy. The company’s joint ventures with Petroleos de Venezuela SA (PDVSA) have contributed significantly to stabilizing inflation and boosting oil production.
As of mid-2024, Chevron’s production in Venezuela exceeded 200,000 barrels per day, representing approximately 20% of the nation’s total output. This production has been instrumental in raising Venezuela’s overall oil output above 1 million barrels per day. Revoking Chevron’s license could significantly impact Venezuela’s oil production and overall economic stability. The potential consequences of this decision remain uncertain, but it is clear that the move will have a profound impact on the Venezuelan economy and US-Venezuela relations. The six-month wind-down period stipulated in the original license agreement would allow Chevron to gradually cease operations, potentially mitigating some of the immediate economic shock.
