Jeso Carneiro / Flickr
The White House administration reimposes sanctions on Venezuela’s energy sector
The U.S. Treasury Department has officially revoked the license that allowed the oil giant Chevron Corp. to sell Venezuelan oil in the United States, giving the American company 30 days instead of five months to wind down its operations in Venezuela.
This decision was expected. On Feb. 26, U.S. President Donald Trump accused the government of Venezuelan President Nicolás Maduro, via his social media outlet Truth, of failing to meet democratic standards for holding presidential elections and «not expeditiously returning immigrants subject to deportation» from the United States. As punishment, Trump wrote in his post, «we are hereby canceling the concessions that the corrupt Joe Biden gave to Nicolás Maduro of Venezuela in the oil deal».
The same fate awaits other international companies that hold licenses with Chevron and sell Venezuelan oil in the United States. These include Spain’s Repsol, Italy’s Eni, France’s Maurel & Prom and India’s Reliance Industries, which together with Chevron produce 450,000 barrels per day (b/d) in Venezuela, out of the country’s total production of 900,000 b/d.
According to the Washington-based analytical center InterAmerican Trends, «the contribution of foreign oil companies to the functioning of the Maduro government amounts to between $700 and $800 million per month».
Since his election victory last November and his inauguration in January, Trump has repeatedly stated that the United States does not need Venezuelan oil, and he has not ruled out the possibility of revoking Chevron’s license to extract oil.
However, in his post, Trump did not mention the California company Chevron or the permit, officially known as the «General License», which exempts the company from economic sanctions and allows it to export and sell Venezuelan oil in the United States.
According to OPEC, Chevron has increased its oil production in joint ventures with PDVSA over the past year and now sends about 240,000 b/d to its own refineries and other customers.
The license revocation means the oil giant will no longer be able to export Venezuelan oil. And if Venezuela’s state oil company (Petroleos de Venezuela S.A., PDVSA) sells oil that Chevron previously exported, American refiners will not be able to buy it because of the sanctions.
«The U.S. government has made a destructive and inexplicable decision by imposing sanctions on the American company Chevron», said Venezuelan Vice President Delcy Rodríguez.
In October 2023, the U.S. Treasury Department issued «General License 44» (GL44) — a six-month reprieve that effectively allowed Caracas to export oil without discounts and use the services of «unreliable intermediaries». In April 2024, the Biden administration reimposed full restrictions, accusing Maduro’s government of «failing to implement the agreement with the U.S.-backed opposition» — in other words, of falsifying the results of Venezuela’s July 2024 presidential election.
The political background of the Biden administration’s actions is obvious to everyone. Formally, it was linked to the results of the presidential elections in the South American country. Maduro kept his word, despite his own political costs, despite all the attacks on his government and the financial-political support that Washington provided to the opposition. The July 2024 elections were held in accordance with the law. Moreover, the Biden administration initially effectively recognized their outcome.
But a pretext was needed not only for the Democrats to appear democratic, but also to remain «clean» in the eyes of the oil sector, which is instrumental in pumping «black gold» in Venezuela.
During his first term, Trump pursued a policy of «maximum pressure» on Maduro’s government, especially regarding Venezuela’s energy sector, including financial sanctions, export embargoes and secondary sanctions. Washington wanted to deprive the country of its main source of income in order to provoke a regime change.
This policy led not only to an economic crisis in Venezuela, but also to the migration of several million Venezuelans between 2017 and 2021 to Latin American countries and primarily to the United States.
Biden’s easing of Trump’s sanctions against Venezuela was not out of love for the people «suffering under Maduro’s harsh regime». It was all about the money that the old Democrat loves so much.
Although relations between Venezuela’s ruling United Socialist Party and the U.S. parties — Democratic and Republican — have historically been and continue to be strained, both sides are ultimately driven by economic necessity and the benefits of Venezuelan oil shipments to the North.
Venezuela has the largest proven oil reserves in the world, and its energy superiority lies not only in quantity but also in quality. Moreover, the Gulf Coast of Mexico is vital to the United States. If Venezuelan oil supplies to the region are disrupted, refiners such as Chevron and Valero will have to turn to less reliable and lower caliber suppliers, which experts say is undesirable.
According to the analytical company Kpler, Chevron’s oil exports from Venezuela reached 294,000 b/d in January of this year — the highest level since the company resumed shipments at the beginning of 2023. The crude oil was sent to refineries in the United States.
But the South American country’s vast potential remains untapped. Those around Trump say the president is well aware of this. He has always been interested in exceeding the expectations of the elite and striking a lucrative deal.
Trump’s goal is a «new golden age of America», and he knows that destroying the country’s energy ecosystem would be prohibitively expensive and extremely painful.
Moreover, regardless of the anti-Venezuelan sentiments in his cabinet, the U.S. president will be reluctant to weaken the country’s energy sector, as this would benefit Russia, China and Iran — something that is absolutely not in his plans.
Resuming cooperation with Venezuela on mutually beneficial trade terms, particularly the exchange of much-needed crude oil for much-needed U.S. dollars, would undoubtedly be a better solution. Conversely, cutting off imports from Venezuela would also have a negative impact on U.S. economic stability.
However, analysts had expected that the White House would give Chevron more time to wind down its activities, which would allow the Trump administration and Maduro’s government to try to negotiate an agreement to resolve the crisis in the area.
The Trump administration’s decision to revoke licenses from companies will negatively affect Venezuela’s financial and socio-economic situation and its people. However, it will not lead to a change in the government or the president — a fact already proven by time, sanctions, and the «maximum pressure» policy.
It remains unclear what will happen to the tankers carrying Venezuelan oil that are currently headed to U.S. ports or that will have to leave Venezuela by the end of the month. Although the suspension of the licenses will cut off Venezuelan oil from international markets — particularly from the refineries served by Chevron in the United States — this does not mean that the supply of «black gold» from the South American country to the U.S. will completely cease.