In a significant blow to the Venezuelan government, former US President Donald Trump has announced the revocation of a licence that allowed US oil giant Chevron to operate in Venezuela. The decision, revealed via Trump’s Truth Social platform, comes as a response to the Venezuelan government’s failure to meet “electoral conditions” and delays in deporting “violent criminals” to the US. The licence, granted by the Biden administration in 2022, had enabled Chevron to resume limited oil operations in Venezuela through joint ventures with the state-run oil company PDVSA, providing vital dollar income to the embattled Maduro regime.
Trump’s move is seen as a direct reversal of the concessions made under President Biden, specifically the oil transaction agreement of November 2022. This licence had allowed Chevron to extract natural resources in Venezuela but prohibited it from paying taxes or royalties to the Venezuelan government. Chevron spokesman Bill Turenne emphasized the company’s commitment to complying with US laws and sanctions.
Chevron’s CEO Mike Wirth had previously warned that withdrawing from Venezuela could increase China and Russia’s influence in the region, potentially worsening the Venezuelan economy and contributing to more migration toward the US. In contrast, opposition leaders in Venezuela have long criticized the licence, arguing it served as a crucial financial lifeline for Maduro’s government.
The licence was originally granted as part of a broader strategy to push Maduro towards holding free and fair elections. However, following the disputed 2024 elections in Venezuela, where Maduro’s victory was not recognized by the opposition or the US, the licence remained active. Trump’s decision, which follows a recent visit by his envoy Richard Grenell to Caracas, is expected to further strain relations and increase economic hardship in Venezuela.
Venezuela’s Vice-President Delcy Rodríguez warned that the sanctions could exacerbate migration to the US, an issue Trump has prioritized throughout his political career. The announcement of the licence revocation immediately impacted oil prices, which saw a 1% increase.
Sources: Chevron, Financial Times, Venezuelan Government, Trump’s Truth Social Post
