The Biden-era Chevron license agreement with Venezuela has been officially revoked by President Donald Trump, marking a major policy shift in U.S. relations with the South American nation. The decision effectively ends Chevron’s ability to extract and export Venezuelan oil, significantly impacting both the company’s operations and Venezuela’s struggling economy.
Background of the Chevron License
In November 2022, the Biden administration granted Chevron special permission to resume operations in Venezuela as part of an effort to restore diplomatic engagement and encourage democratic reforms under President Nicolás Maduro’s regime. This move allowed the U.S. oil giant to export up to 240,000 barrels of Venezuelan oil per day, supplying the U.S. while providing economic support to Venezuela.
The agreement was structured as a step toward easing sanctions, with the hope that the Maduro government would commit to electoral reforms and cooperate on migrant repatriation efforts.
Why Trump Revoked the License
President Trump’s administration justified the decision by citing lack of progress on democratic reforms in Venezuela. Officials pointed out that Maduro’s government had failed to meet the conditions outlined in the 2022 agreement.
In his statement, President Trump criticized the Biden-era deal, calling it an “ineffective and unmet concession agreement.” He further noted that Venezuela had not cooperated sufficiently in repatriating migrants, adding to growing tensions over U.S. immigration policies.
Impact on Chevron and Global Oil Markets
Chevron, which has operated in Venezuela for over 100 years, will now be forced to halt all oil exports from the country. This cuts off a major supply source to the U.S. and could potentially affect global oil prices.
- Chevron’s Response: A company spokesperson confirmed that they were “evaluating the implications” of the policy change but emphasized that Chevron had followed all U.S. laws and sanctions while operating in Venezuela.
- Oil Market Reactions: Following the announcement, oil prices rose, as analysts warned that this could tighten supply and increase dependence on OPEC+ nations for crude oil.
How Venezuela Will Be Affected
The revocation of Chevron’s license is a significant economic blow to Venezuela, which has relied on Chevron's investment and technology to keep its oil sector operational.
- Oil is Venezuela’s primary source of revenue, and Chevron’s departure may lead to production declines and worsening economic conditions.
- Vice President Delcy Rodríguez condemned the U.S. decision, calling it “harmful and irrational”, warning that it could increase migration pressures as Venezuela’s economic situation deteriorates.
Political Reactions
The decision has drawn strong reactions from U.S. politicians, with Republicans largely supporting it and Democrats warning of economic consequences.
- Florida Senator Marco Rubio, a long-time Maduro critic, praised the move, stating that “the U.S. should never have allowed Venezuela to fund its dictatorship through oil profits.”
- Congressional Democrats, however, have expressed concerns that cutting off Venezuela’s oil supply could push it closer to China and Russia, further complicating U.S. foreign policy in Latin America.
What’s Next?
With Chevron’s exit, Venezuela may turn to alternative buyers, such as China and India, for oil exports. However, this limits Venezuela’s ability to generate revenue due to sanctions and restricted market access.
In the U.S., oil companies are expected to lobby for alternative measures, while energy analysts predict short-term price fluctuations as the markets adjust.
This policy change signals a harder stance against Maduro’s government and sets the stage for further diplomatic and economic conflicts between Washington and Caracas.