The U.S. has ordered Chevron to halt its operations in Venezuela within one month, significantly impacting the Maduro government. Chevron contributes 250,000 barrels of oil daily, critical for the Venezuelan economy. This directive marks a notable shift in U.S. policy, reversing earlier engagement efforts under President Trump amid pressure from Republican constituents. Experts warn of severe economic consequences as a result of this decision.
The United States has mandated that Chevron cease its operations in Venezuela within one month, a decision poised to significantly impact the already strained Venezuelan economy. Chevron is currently responsible for the production and export of approximately 250,000 barrels of crude oil daily, which supplies crucial revenue to the government led by Nicolas Maduro. However, the Department of the Treasury has insisted on a strict timeline for the shutdown, which experts consider impractical.
This new directive highlights a dramatic alteration in former President Donald Trump’s approach towards Venezuela, a nation traditionally viewed as an adversary by the United States. During his first term, Trump emphasized a strategy of maximum pressure against the Maduro regime, enforcing sanctions and curtailing the operations of American oil companies. However, upon his return to office, he appeared willing to explore engagement with the Venezuelan government, even agreeing to a deal that aimed to facilitate the release of U.S. citizens in exchange for the acceptance of migrant deportees.
Despite initial outreach, Trump’s policy has shifted sharply under pressure from Republican constituents in Florida, advocating for support towards pro-democracy movements in Venezuela. Following a recent budget vote in Congress, Trump reversed his stance, asserting that Venezuela did not fulfill its commitments to conduct fair elections. The abrupt pivot has drawn concerns regarding the potential consequences of terminating Chevron’s exports on Venezuela’s already fragile economy.
Experts predict that the cessation of Chevron’s operations could result in severe economic downturns for Venezuela, potentially intensifying the already significant emigration crisis. The loss of Chevron-related revenue, estimated at $150-$200 million monthly, would exacerbate Maduro’s government’s continued depletion of foreign reserves. Vice President Delcy Rodriguez criticized the decision, stating, “The new US government is trying to hurt the Venezuelan people. It’s a self-inflicted blow that is going to increase fuel prices.”
While oil markets seemed unaffected by the announcement, following OPEC’s decision to boost output, Chevron’s stock has dipped by approximately 2.8 percent. The country’s oil production has drastically decreased from 3.5 million barrels per day to about one million, owing to a combination of global price drops and stringent U.S. sanctions. It is noteworthy that European companies such as Eni, Repsol, and Shell, which also operate in Venezuela, are not impacted by this directive.
In summary, the United States has imposed a one-month deadline for Chevron to terminate its operations in Venezuela, marking a significant shift in policy. This decision could have dire economic repercussions for the Venezuelan government, further exacerbating the country’s struggles. The action reflects a departure from earlier engagement efforts under the Trump administration, now facing mounting pressure to support democratic movements in Venezuela.
Original Source: www.rnz.co.nz
