U.S. Orders Chevron to Halt Venezuela Operations: Implications and Consequences

The U.S. has instructed Chevron to terminate operations in Venezuela within thirty days, impacting the Maduro government significantly. This decision symbolizes a shift in Trump’s policy from initial engagement to renewed sanctions. Experts warn this could lead to a recession in Venezuela, with expected losses in foreign reserves and increased challenges for the populace.

On Tuesday, the United States mandated Chevron to cease its operations in Venezuela within one month, significantly impacting the financially strained authorities in Caracas. Currently, Chevron accounts for nearly a quarter of Venezuela’s crude oil production, which is critical for sustaining Nicolás Maduro’s government.

The U.S. Treasury Department announced that Chevron must halt production within 30 days, a timeline deemed unrealistic by industry experts. This directive marks a dramatic change in Donald Trump’s approach to Venezuela, shifting from his previous stance of “maximum pressure” against the regime.

During his initial term, Trump enforced strict sanctions on Venezuela and restricted U.S. oil companies’ operations. However, upon his return to office, he attempted to engage with Maduro, facilitating a deal for the release of U.S. citizens in exchange for the acceptance of deportees.

Trump faced significant pressure from Florida Republicans advocating for support of pro-democracy parties in Venezuela amid concerns over the integrity of recent elections. Recent changes in the political landscape prompted Trump to reverse course, asserting that Venezuela had failed to conduct fair elections and was noncompliant with previous agreements.

Experts warn that the cessation of Chevron’s exports could lead Venezuela into a recession and exacerbate the exodus of its citizens. The loss could amount to a decline in foreign reserves by approximately $150-200 million monthly for Maduro’s regime. Vice President Delcy Rodriguez argued, “The new US government is trying to hurt the Venezuelan people.”

Despite the seriousness of the news, oil markets were relatively unperturbed, particularly following OPEC’s decision to increase production. Chevron’s stock, however, has seen a decline of approximately 2.8 percent over the past week, reflecting investor concerns. Although Venezuela once produced 3.5 million barrels daily, current production is just above one million. From 2014 to 2021, Venezuela’s GDP suffered an 80 percent decline, exacerbated by low oil prices and stringent U.S. sanctions. Notably, European firms such as Eni, Repsol, and Shell were not affected by this action.

In summary, the U.S. government’s recent directive for Chevron to halt operations in Venezuela within thirty days has significant implications for Nicolás Maduro’s administration and the Venezuelan economy. This decision is indicative of a drastic shift in Donald Trump’s policy approach, moving from engagement back to sanctions. The potential economic repercussions could lead to deeper financial turmoil for the nation and heightened challenges for its citizens, illustrating the complex interplay of international relations and domestic stability in Venezuela.

Original Source: www.france24.com