U.S. Administration Set to Increase Pressure on Venezuela’s Economy by Halting Operations of More Companies

The Trump administration is preparing to compel more companies to exit Venezuela, amplifying pressure on President Nicolás Maduro following Chevron’s mandated departure. Companies like Etablissements Maurel & Prom SA face potential sanctions, which could significantly harm Venezuela’s economy reliant on oil. Foreign entities await waivers’ status as tensions rise, while negotiations continue following recent developments involving U.S. detainees.

The Trump administration is reportedly preparing to mandate that additional companies cease operations in Venezuela, intensifying pressure on President Nicolás Maduro. This decision follows the directive to Chevron Corp. to halt its activities in the country. Sources indicate companies such as French oil producer Etablissements Maurel & Prom SA and an asphalt company affiliated with Florida oil tycoon Harry Sargeant have been notified they will have 30 days to end operations following the revocation of their operational waivers by the U.S. Treasury, expected to occur soon.

This initiative could significantly impact Venezuela’s struggling economy, as Maduro faces increasing scrutiny amidst U.S. demands for democratic reforms and a pledge to accept more migrants. The Treasury Department previously instructed Chevron to conclude its Venezuelan operations by April 3, a timeline drastically shorter than the customary six-month phase-out.

Venezuela’s economy is heavily reliant on oil, with Chevron and other smaller firms playing essential roles due to the dire state of the national oil company, hindered by years of neglect and underinvestment. The Trump administration is divided regarding the appropriate strategy for Venezuela, leaving open the possibility that President Trump may reverse his stance and allow oil companies to remain active.

Other foreign entities, including Spain’s Repsol SA and Italy’s Eni SpA, are awaiting updates on the status of their operational waivers amid the looming sanctions. According to estimates from the Caracas-based consultancy Ecoanalítica, joint operations between Chevron and Petroleos de Venezuela SA account for a quarter of the revenue supporting the Maduro administration for the years 2023 and 2024. A loss of Chevron’s market presence may lead to an anticipated 7.5% contraction in the nation’s economy as per the opposition-led Finance Observatory.

In January, a Trump adviser, Rick Grenell, met with Maduro to restart negotiations, which successfully resulted in the release of six U.S. prisoners and the recommencement of deportation flights. Consequently, 166 Venezuelan migrants have been sent back from the U.S., with the last flight arriving in Caracas on February 20. Despite these developments, Maduro minimized the implications of losing Chevron, claiming that oil production would remain stable.

The potential U.S. directive for more companies to cease operations in Venezuela marks a pivotal moment for the country as it navigates economic challenges. The impact of halting operations has serious implications for Venezuela’s oil-dependent economy and could exacerbate existing hardships for the Maduro administration. As negotiations and international dynamics evolve, the situation remains fluid, highlighting the complexities of U.S.-Venezuela relations.

Original Source: www.livemint.com