Trump Ends Chevron Permit, Delivering Major Blow to Venezuela

WASHINGTON, 27 February 2025 (BSS/AFP) – US President Donald Trump announced on Wednesday that he was revoking the permit allowing Chevron to operate in Venezuela, cutting off a critical source of revenue for the crisis-stricken economy of Nicolás Maduro’s government.

Sanctions Reinstated Amid Political Tensions

Trump’s decision comes amid escalating tensions with the Venezuelan administration, which he accused of failing to honour commitments made to a US envoy regarding the return of deported Venezuelans. This move reverses the sanctions relief granted by former President Joe Biden in 2022, which had enabled Chevron to resume oil production in the country.

Biden’s decision to ease restrictions was initially tied to securing the release of detained Americans and a commitment from Maduro to hold fair elections. However, when it became evident that opposition parties were being sidelined, Biden reimposed most sanctions, though he kept Chevron’s exemption to prevent a sharp rise in US fuel prices before elections.

“We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro,” Trump wrote on his Truth Social platform, signalling a return to a hardline stance against Venezuela.

Chevron’s Presence in Venezuela

Chevron, the only US oil company operating in Venezuela, ceased production in 2018 due to Trump-era sanctions, but was later permitted to return under Biden’s administration. Since then, it has played a key role in reviving Venezuela’s struggling oil sector, extracting approximately 240,000 barrels per day, accounting for nearly a quarter of the nation’s total oil output.

Trump justified the Chevron ban by accusing Maduro’s government of failing to meet election conditions and of delaying deportations of Venezuelan migrants.

“Additionally, the regime has not transported the violent criminals they sent into our country (the Good Ole’ U.S.A.) back to Venezuela at the agreed-upon pace,” he claimed.

Venezuela Reacts: Economic and Migration Warnings

Venezuela’s Vice President, Delcy Rodríguez, denounced the decision as “damaging and inexplicable”, warning that it could worsen the country’s economic crisis and lead to a new wave of migration—ironically, an issue that Trump himself prioritises.

“In its attempt to harm the Venezuelan people, it is in fact hurting the United States, its citizens, and companies, while also undermining the US international investment framework,” she stated on Telegram.

She further argued that similar US sanctions between 2017 and 2021 played a significant role in triggering the mass migration of Venezuelans, which has since led to millions fleeing the country.

The Trump administration has made it clear that it intends to deport some 600,000 Venezuelans who were previously protected under Biden’s immigration policies. Following a visit by Trump’s special envoy, Ric Grenell, Venezuela agreed to repatriate undocumented migrants, and has since facilitated the return of nearly 200 Venezuelans via two chartered flights.

More than seven million Venezuelans have already fled the country due to economic collapse, political repression, and social instability, with most seeking refuge in neighbouring Latin American nations.

Economic Consequences: A Looming Recession?

Experts warn that the loss of Chevron’s operations could have severe macroeconomic repercussions for Venezuela.

• Asdrúbal Oliveros, director of the economic think tank Ecoanalítica, predicts major financial instability, particularly affecting the exchange rate, inflation, and overall economic growth.
• Leonardo Vera, an economist at the Central University of Venezuela, estimates that the decision could strip the country of $150–200 million per month, potentially pushing Venezuela back into recession.

However, he noted that Chevron may still be allowed to operate until September, leaving a window for diplomatic negotiations between the Maduro and Trump administrations.

“Some kind of negotiation could take place in the coming months, provided both sides see an opportunity to secure mutual benefits,” Vera suggested.

Meanwhile, Chevron spokesperson Bill Turenne stated that the company was assessing the implications of Trump’s decision, adding that it has always complied with US laws and sanctions frameworks in its Venezuelan operations.

Wider Implications: Oil Markets and US Elections

The revocation of Chevron’s permit could also have global consequences, potentially tightening global oil supplies and influencing fuel prices. While the Biden administration had sought to balance sanctions enforcement with economic pragmatism, Trump’s latest move signals a shift towards maximum pressure on Venezuela.

With US elections approaching, Trump’s stance could appeal to hardline voters, particularly among Florida’s anti-Maduro Venezuelan-American community. However, any economic fallout from oil supply disruptions could also impact domestic fuel prices, a key factor for American voters.

The coming months will determine whether Trump’s hardline approach forces Maduro to make concessions—or if it simply pushes Venezuela further into economic turmoil.