Trump ends Chevron permit in major blow to Venezuela

by Shaun Tandon with Javiar Tovar in Caracas

U.S. President Donald Trump said Wednesday he was revoking permission for oil giant Chevron to operate in Venezuela, removing a crucial source of revenue in a wobbly economy run by leftist adversary Nicolas Maduro.

Trump accused Maduro of failing to live up to promises to take back deported Venezuelans as pledged to a US envoy, whose visit to Caracas had initially been seen as a sign the new US administration would focus on pragmatic engagement rather than upping pressure.

Former president Joe Biden in 2022 eased sanctions and gave Chevron permission to operate in Venezuela in return for the release of detained Americans and a promise by Maduro to allow fair elections.

Biden reimposed most sanctions as it became clear that Maduro was sidelining the opposition but maintained the concession to Chevon, in part out of concern of causing a spike in oil prices in the United States before elections.

"We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolas Maduro," Trump wrote on his Truth Social platform.

Trump, who rarely faults authoritarian leaders over democracy, said that the election conditions had not been met by Maduro, who was sworn in to a third term last month despite wide accusations of vote rigging.

"Additionally, the regime has not been transporting the violent criminals that they sent into our Country (the Good Ole' U.S.A.) back to Venezuela at the rapid pace that they had agreed to," Trump wrote.

Chevron, the only US oil company in Venezuela, had previously stopped production in the country in 2018 due to sanctions by Trump in his first term.

Since its return, it has helped revive an oil sector that has declined precipitously since the 1990s. Chevron pumps around 240,000 barrels a day from Venezuela, or nearly one quarter of the country's total output.

- Warning on migration -

Venezuelan Vice President Delcy Rodriguez called the Trump administration's decision "damaging and inexplicable" and warned of the effect on migration -- the key priority for Trump.

"In its attempt to harm the Venezuelan people, it is in fact hurting the United States, its population and its companies, and also calling into question the legal security of the US's international investment regime," she wrote on Telegram.

"Venezuela emphasizes that these kinds of failed decisions prompted the migration from 2017 to 2021 with the widely known consequences."

The Trump administration in its first week of office said it was ready to deport some 600,000 Venezuelans in the United States who had been shielded from removal by Biden under a program for citizens of countries of high risk.

Ric Grenell, a Trump loyalist who serves in a broad role as his envoy for special missions, visited Maduro and demanded that Venezuela take back citizens.

Venezuela soon after sent two planes that brought back nearly 200 undocumented migrants. More than seven million Venezuelans have fled, mostly to other Latin American countries, since the implosion of the economy and political and social turmoil.

Chevron spokesman Bill Turenne said that the company was aware of the decision and "considering its implications."

"Chevron conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by US government," he said.

Asdrubal Oliveros, director of the analytical firm Ecoanalitica, expected a "major macroeconomic impact" from the decision, particularly on the exchange rate, inflation and ultimately on national growth.

Leonardo Vera, an economic professor at the Central University of Venezuela, said that Chevron's absence could deprive the country of $150-200 million per month, potentially bringing recession.

But he said that Chevron likely would still operate until September, giving time for diplomacy between the Maduro and Trump administrations.

"Some kind of negotiations could take place in the intervening months so long as the two sides feel they can obtain firm benefits," he said.

© Agence France-Presse