US Administration Considers Further Sanctions Against Companies Operating in Venezuela

The Trump administration plans to force additional companies to cease operations in Venezuela, intensifying pressure on President Maduro following Chevron’s exit. Companies will have 30 days to comply after waiver revocations. This decision could worsen Venezuela’s economic state, which heavily relies on oil revenues. The situation remains dynamic, with potential policy changes still possible amidst ongoing discussions.

The Trump administration is reportedly preparing to compel additional companies to cease operations in Venezuela, intensifying pressure on President Nicolas Maduro after Chevron Corp. was directed to terminate its activities. Companies such as the French oil producer Etablissements Maurel & Prom SA and an asphalt firm operated by Florida’s Harry Sargeant have been informed they will be given 30 days to halt operations once the U.S. revokes their operational waivers. This action could commence as soon as Friday, as per insider sources.

Halting operations of these companies will adversely affect Venezuela’s fragile economy, exerting further pressure on Maduro as Trump seeks concessions related to democratic reforms and increased acceptance of migrants from the U.S. The Treasury Department instructed Chevron to complete its exit by April 3, significantly shorter than the customary six-month period.

Venezuela’s economy is heavily reliant on oil, with Chevron and other smaller firms playing a pivotal role in its recovery due to the poor condition of the state oil enterprise caused by years of insufficient investment. The Trump administration’s positions on Venezuela have been influenced by a range of advisers who may advocate for varying strategies, potentially leading to last-minute alterations in policy allowing oil companies to remain operational.

Companies like Spain’s Repsol SA and Italy’s Eni SpA are also anticipating announcements from the U.S. regarding the status of their operational waivers amid impending sanctions. Joint operations between Chevron and Petroleos de Venezuela SA have provided a significant portion of the Maduro regime’s revenue for 2023 and 2024, with projections indicating that the absence of Chevron could result in a 7.5 percent reduction in Venezuela’s economy this year.

Rick Grenell, a Trump adviser, met with Maduro in January to reinstate direct discussions, which facilitated the return of six U.S. prisoners and the resumption of deportation flights. As a result, 166 Venezuelan migrants have been repatriated from the U.S., with the latest flight arriving in Caracas on February 20. Maduro, however, minimized the implications of Chevron’s departure, asserting that “output will not even fall one liter or barrel.”

The Trump administration is poised to escalate pressure on Venezuela by mandating that more companies cease operations following strict sanctions, significantly impacting the nation’s economy. As companies face impending operational deadlines and the consequences of losing significant revenue contributors, the administration’s decisions may alter the political landscape and push for reforms. Despite Maduro’s assurances regarding oil output, the potential economic ramifications underscore the critical dependency Venezuela has developed on external oil sources.

Original Source: www.business-standard.com