President Donald Trump ordered the termination of Chevron‘s (NYSE: CVX) license to operate in Venezuela on Wednesday, accusing President Nicolas Maduro of failing to implement electoral reforms and reneging on agreements to accept deported Venezuelan migrants.
Brent crude futures rose to $73.39 a barrel on Thursday, while US West Texas Intermediate crude climbed to $69.40, recovering from two-month lows as traders assessed the impact of Chevron’s forced exit from Venezuela.
“Chevron’s exit could reduce Venezuela production, giving OPEC+ capacity to increase output. If this occurs, coastal U.S. refiners could incur higher procurement costs,” TD Cowen analysts said in a note.
Trump accused Venezuelan President Nicolas Maduro of failing to implement electoral reforms and reneging on agreements to accept deported migrants when he announced the decision on Truth Social.
“We are hereby reversing the concessions that Crooked Joe Biden gave to Venezuela, on the oil transaction, dated November 26, 2022,” Trump wrote on his Truth Social platform, referring to the license granted to Chevron during the previous administration.
The decision, set to take effect March 1, would cut off Chevron’s exports of roughly 240,000 barrels per day of Venezuelan crude — more than a quarter of the country’s entire oil output — dealing a significant blow to Venezuela’s struggling economy.
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Venezuelan Vice President Delcy Rodriguez condemned the move as a “damaging and inexplicable decision,” warning it would only exacerbate migration pressures. The Maduro government stands to lose between $2.1 billion and $3.2 billion annually in oil-related revenues from licenses to Chevron and European companies, according to consultancy Aurora Macro Strategies.
Secretary of State Marco Rubio later announced he would provide guidance to terminate all Biden-era oil and gas licenses that have “shamefully bankrolled the illegitimate Maduro regime.”
The revocation comes just weeks after US envoy Richard Grenell met with Maduro in Caracas, securing the release of six American detainees and an agreement for Venezuela to accept deported migrants. Trump claimed Maduro has not followed through on migrant returns “at the rapid pace that they had agreed to.”
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