US Withdrawal of Chevron License Draws Venezuelan Condemnation

The Trump administration plans to revoke Chevron’s license to operate in Venezuela, reversing a previous agreement established under the Biden administration. This decision has been met with condemnation from the Venezuelan government, which believes the increased sanctions will have damaging economic repercussions. Analysts suggest the move is influenced by political pressures, particularly from Florida, indicating a significant shift toward a hardline policy against Venezuela as economic impacts are anticipated with the loss of revenue.

On February 27, 2025, the Trump administration announced its intention to revoke Chevron’s license from the U.S. Treasury to operate in Venezuela. The decision, highlighted in a social media post by President Trump, comes as a reversal of the November 2022 oil transaction agreement and General License 41 (GL41) initiated by the Biden administration, which previously allowed Chevron to resume operations.

President Trump criticized the Venezuelan government for failing to meet certain electoral conditions and delaying the deportation of violent criminals. This decision marks a significant shift in U.S. policy, exacerbating relations with Caracas. Notably, Trump’s administration previously showed signs of engagement with Venezuela, as Special Envoy Richard Grenell met with President Nicolás Maduro earlier that year.

In response to the U.S. decision, the Venezuelan government condemned the increase in sanctions, asserting that U.S.-led measures have exacerbated migration and its associated challenges. Caracas deemed the withdrawal of Chevron’s license as both damaging and inexplicable, expressing confidence that the Venezuelan economy would persevere while asserting that the sanctions would ultimately harm U.S. interests as well.

Analysts suggest that the cancellation of Chevron’s waiver is a concession to hardliners within U.S. politics, particularly those from Florida, as budget negotiations approach. Figures like Secretary of State Marco Rubio and members of the Venezuelan far-right opposition have long advocated for stricter sanctions against Venezuela, positioning themselves in contrast to the previous administration’s more lenient approach.

On the legislative front, Congressman Carlos Gimenez expressed expectation for further actions targeting the Maduro government, indicating a strong stance against the current Venezuelan administration. The discussion around Temporary Protected Status (TPS) for Venezuelans remains stagnant, diverging from the hardening of sanctions as the primary focus of Florida politicians.

Chevron, representing significant investment in Venezuela’s oil sector, noted that it maintains communications with the U.S. government to navigate its operations. The company’s license enables a rolling six-month operation, but the prospective revocation will require a reassessment of its operational strategy in Venezuela, given the current geopolitical climate.

The loss of General License 41 is projected to significantly impact Venezuela’s economy, potentially resulting in a loss of approximately $4 billion in revenue by 2026. Such repercussions could hinder the nation’s foreign currency supply and incite inflationary pressures, complicating the economy’s recovery efforts amidst ongoing sanctions and trade restrictions.

Despite the challenges posed by the sanctions, European entities such as Repsol, Eni, and Maurel & Prom have received U.S. approval to sustain their operations in Venezuela. Trinidad and Tobago’s government also seeks U.S. permission for gas development projects in collaboration with Venezuela while maintaining compliance with U.S. sanctions.

The recent decision by the Trump administration to revoke Chevron’s operations license in Venezuela represents a significant shift in U.S. policy, emphasizing a hardline approach towards Caracas. The Venezuelan government has condemned this move as detrimental, asserting that it hampers economic recovery and serves U.S. interests adversely. Analysts indicate this decision may cater to political pressures within the U.S., particularly from Florida’s legislative representatives. The broader implications for Venezuela’s economy remain concerning, with potential revenue losses anticipated as a result of tightened sanctions. Meanwhile, Chevron’s future operations will require strategic recalibration to navigate the ongoing complexities of U.S.-Venezuela relations.

Original Source: venezuelanalysis.com