Crude Consequences: The End of Chevron’s License in Venezuela

What has happened?

On February 27, President Trump axed Chevron’s activities in Venezuela and gave the corporation a 30-day period to wind down operations in the South American country (Fernandez et al. 2025). Chevron will now no longer be able to export Venezuelan crude oil. The United States sourced 220,000 barrels per day (bpd) of Venezuelan oil in 2024, and its supply will continue further constrained, especially as the continuation of the Ukraine conflict continues to lock out Russia-supplied oil. The wider international community faces similar supply concerns – oil prices rose 2 per cent the day following the White House’s license revocation (Cavcic 2025).

Chevron in Venezuela

The 2023 Barbados Agreement between the Plataforma Unitaria Democrática, the leading opposition party in Venezuela, and the regime of Nicolás Maduro, sought an approach to free and fair elections that exchanged democratic promises for licenses for American companies in the South American nation (Blinken 2023). Enabling corporate activities to produce and export oil and gas in Venezuela looked to incentivise the Maduro administration to commit to the electoral roadmap outlined with the opposition, particularly the reinstatement of all political candidates and the guaranteed involvement and protection in the presidential election process. In essence, the Biden administration attempted to pursue a carrot-and-stick method that coerced the Maduro regime into democratic reform. Sanctions relief was revoked in part in January 2024 after opposition candidate María Corina Machado was disqualified from political representation for 15 years by the Supreme Tribunal of Justice for alleged connection to the corruption plot of disputed interim president Juan Guiadó (AFP 2024), in a weak attempt by Washington to force Caracas to concede. The straw that broke the camel’s back appears to be the attempted arrest of now-opposition leader Corina Machado by militant “forces of the Nicolás Maduro regime” on 9 January 2025, an outright violation of the Barbados Agreement guarantees (infobae 2025).

Trump’s Take on Maduro

During his first stint in the White House, President Trump installed a “maximum pressure” campaign on the Maduro regime (Phillips 2025), applying sanctions and military threats in an effort to flip military chiefs against the Venezuelan autocracy, and ignite an internal transition towards democracy. Despite this, American aggression shored up support for Maduro and only harshened economic conditions on ordinary venezolanos. Nonetheless, with the appointment of former Florida Senator Marco Rubio to the Secretary of State position, a vocal opponent to Maduro’s “narco regime” (ibid), it appears the White House’s approach is likely to regurgitate its hawkish stance that attempts to pressure Caracas into internal change. Revoking the Chevron license is a step in that process. Ending oil exportation from Venezuela not only condemns continued autocracy by the Maduro regime, but it also appears as a punishment for illegal flows of migrants into the United States and the failure of the Maduro regime to expedite migrant returns back to Venezuela. In essence, Chevron’s license termination intends to mirror the effects of the tariff hikes threatened on Canada, Mexico and China for continued flows of fentanyl over American borders. The potential economic consequences have already been recognised, with Venezuelan business guild Fedecamaras urging the White House to return to the negotiating table to inhibit the ’severe impact on the [Venezuelan] economy’ threatened by the license termination.

What comes next?

With the license revoked and sanctions restored, the Venezuelan ability to contribute and legally sell to the United States, ending exports of up to 220,000 bpd. Likewise, barring American companies from extracting and producing oil will also diminish Venezuelan oil supply to global markets, with the process returning to the sole domain of state-owned Petróleos de Venezuela, SA (PDVSA). Supply will decrease. If OPEC+ members are unable to compensate for the shortfall, the supply-demand imbalance will drive up oil prices. Fortunately, on March 3, producers for the global cartel committed to restore halted outputs following pressure from US President Trump to drive down global oil prices. The group will aim to increase production by 138,000 bpd in April after almost two years of limited production, part of a wider strategy to restore 2.2 million bpd by 2026 (Smith et al. 2025). However, restored OPEC+ output is not fully guaranteed in the long-run, as the cartel reserves the ability to ‘pause or reverse’ supply contingent on market conditions. Likewise, global oil prices also remain reliant on a peace deal in the Ukraine conflict, and the subsequent restoration of Russian-supplied oil to global markets.

As for Chevron, CEO Mike Wirth has said the company will look to transition investment into Asia as its activities in Venezuela come to a close in the short-term, but urges a less tumultuous approach to licensing in Venezuela that will contribute to consistency in the energy industry (Dyos 2025). This stability is unlikely to come under the current Trump administration, at least not until the congressional midterms, and possible change in GOP-controlled legislature.

Bibliography

AFP. (2024). Venezuela’s Supreme Court Disqualifies Opposition Leader from Running for President. Le Monde. [online] 27 Jan. Available: https://www.lemonde.fr/en/international/article/2024/01/27/venezuela-s-supreme-court-disqualifies-opposition-leader-from-running-for-president_6469941_4.html.

Blinken, A. J. (2023). Signing of Electoral Roadmap Between the Unitary Platform and Representatives of Maduro. US Embassy Caracas. [online] 18 Oct. Available: https://ve.usembassy.gov/signing-of-electoral-roadmap-between-the-unitary-platform-and-representatives-of-maduro/.

Cavcic, M. (2025). US Order Sets Date for Chevron to Grind Oil Exports From Venezuela to a Halt. Offshore Energy. [online] 5 Mar. Available: https://www.offshore-energy.biz/us-order-sets-date-for-chevron-to-grind-oil-exports-from-venezuela-to-a-halt/.

Dyos, S. (2025). Chevron CEO weighs in on oil legislation after Trump pulled its license to operate in Venezuela: ‘Swinging from one extreme to the other is not the right policy approach’. Fortune. [online] 13 Mar. Available: https://fortune.com/2025/03/12/chevron-ceo-mike-wirth-trump-oil-energy-industry-venezuela/.

Fernandez, A., Caballero Jr., G., Noste, D. A., Yepes, C., and Jimenez, K. (2025). OFAC Terminates License Authorizing Certain Petroleum-Related Activities in Venezuela. Holland & Knight. [online] 6 Mar. Available: https://www.hklaw.com/en/insights/publications/2025/03/ofac-terminates-license-authorizing-certain-petroleum-related.

Infobae. (2025). La dictadura de Maduro secuestró y luego liberó a María Corina Machado. Infobae. [online] 9 Jan. Available: https://www.infobae.com/venezuela/2025/01/09/maria-corina-machado-fue-secuestrada-por-la-dictadura-de-nicolas-maduro/.

Phillips, T. (2025) ‘A real wild card’: experts struggle to predict Trump’s stance on Venezuela. Guardian. [online] 20 Jan. Available: https://www.theguardian.com/us-news/2025/jan/20/trump-venezuela-nicolas-maduro.

Smith, G., MacDonald, F., and El Wardany, S. (2025). OPEC+ to Begin Long-Delayed Supply Hike Amid Trump Pressure. Yahoo!News. [online] 3 Mar. Available: https://www.yahoo.com/news/opec-begin-long-delayed-supply-184643250.html