The U.S. government has announced the termination of a license that allowed Chevron (CVX.N) to operate in Venezuela and export its oil. The decision follows concerns over a lack of progress in electoral reforms and migrant returns.
Since 2022, Washington had permitted certain companies, including Chevron, to maintain operations in Venezuela and export crude to select markets such as the U.S., Europe, and India despite broader sanctions on the country’s energy sector. Venezuelan oil accounted for approximately 3.5% of total U.S. crude imports in 2023, equating to around 220,000 barrels per day (bpd). Chevron’s operations in Venezuela have also played a key role in recovering outstanding debts.
According to an update from the U.S. Treasury Department, Chevron has until April 3 to phase out its Venezuelan exports and operations. The scale of the reduction remains unclear. A spokesperson for the company confirmed it would comply with the directive.
A similar order in 2020 allowed Chevron to continue crude production in Venezuela as a joint venture partner with state-run PDVSA but restricted its ability to import or export oil. This led to a decline in output and an accumulation of unpaid revenue.
In early 2024, Chevron’s Venezuelan oil exports fell from 294,000 bpd in January to 252,000 bpd in February, based on vessel monitoring data. Venezuelan officials criticized the decision, warning it could impact U.S. fuel prices and deter foreign investments.
Chevron’s joint ventures with PDVSA represent approximately 25% of Venezuela’s total oil production. The company’s crude supplies are essential for its refineries and those operated by Valero Energy (VLO.N), PBF Energy (PBF.N), Phillips 66 (PSX.N), and Exxon Mobil (XOM.N). The previous license, which enabled joint oilfield operations and trading, had provided revenue to Venezuela’s economy, supporting sectors such as banking and energy.
The license cancellation may reduce the availability of U.S. dollars in Venezuela’s exchange market, potentially contributing to currency depreciation, analysts suggest. The move adds to the country’s economic challenges, as authorities have sought to stabilize inflation through fiscal and monetary controls.
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