CARACAS, VENEZUELA – In a bold move, President Donald Trump announced on Wednesday that the United States government will be terminating Chevron Corp.’s permit to pump and export Venezuelan oil. This decision marks the end of a financial lifeline for the South American country, as the permit has been responsible for a quarter of Venezuela’s oil production.
Trump’s announcement, made on his Truth Social network, cited the lack of democratic conditions in last year’s July presidential election and the slow progress in deporting immigrants as reasons for the termination. The post also mentioned reversing the concessions that President Joe Biden had given to President Nicolás Maduro’s government.
While the post did not specifically mention Chevron or the permit, known as a general license, it is the only Venezuela-related license that matches the dates mentioned in Trump’s social media post. The permit exempts Chevron from economic sanctions and allows them to export and sell Venezuelan oil in the U.S.
The license was initially authorized by Biden’s administration in 2022 after Maduro agreed to work with Venezuela’s political opposition towards a democratic election. However, the election held in July 2024 was deemed neither fair nor free, and Maduro was sworn in for a third six-year term despite evidence that his opponent received more votes.
Despite calls from Venezuela’s opposition and others to rescind the license, Biden’s government resisted for months, stating that the goal of the license was to support the restoration of democracy. However, the opposition estimates that Maduro’s government has received around $4 billion through the permit, which was set to be renewed on Saturday.
The termination of the permit will have significant implications for both Venezuela and Chevron. Venezuela, which sits atop the world’s largest proven oil reserves, has seen a decline in production due to corruption, mismanagement, and U.S. economic sanctions. This has resulted in over 7.7 million Venezuelans leaving their homeland since 2013, with many settling in Latin America and the Caribbean.
Chevron, which has been doing business in Venezuela since the 1920s, operates through joint ventures with the state-owned company Petroleos de Venezuela S.A. (PDVSA). These joint ventures produced around 200,000 barrels of oil per day in 2019. However, when U.S. sanctions were imposed in 2020 to try and topple Maduro, Chevron was forced to wind down production.
In November 2022, Chevron was granted the license to export oil to the U.S., and the joint ventures quickly began producing 80,000 barrels per day. By 2024, they had surpassed their daily output from 2019. The terms of the license prohibit Chevron from directly paying taxes or royalties to Venezuela’s government. However, the company sends money to the joint ventures, which are majority-owned by PDVSA.
It is unclear how Maduro’s government has used this money, as they have stopped publishing financial data several years ago. In a podcast interview with Trump’s son, Donald Trump Jr., opposition leader Maria Corina Machado accused Maduro of using the funds for repression, persecution, and corruption.
This decision by the U.S. government to terminate Chevron’s permit sends a clear and firm message that Maduro’s government is in trouble. It also highlights the importance of democratic conditions and fair elections in international relations. The termination of the permit will undoubtedly have a significant impact on Venezuela’s economy, but it is a necessary step towards promoting democracy and human rights in the country.
Chevron has stated that they are aware of the announcement and are considering its implications. They also emphasized that they conduct their business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by the U.S. government.
In conclusion, the termination of Chevron’s permit to pump and export Venezuelan oil is a significant development in the ongoing political and economic crisis in the country. It is a step towards promoting democracy and human rights, and it sends a clear message to Maduro’s government that their actions will not be tolerated. The U.S. government’s decision is a positive and necessary move, and it is hoped that it will lead to positive changes in Venezuela’s future.
