The U.S. has instructed Chevron to stop operations in Venezuela within a month, impacting its economy. This decision represents a shift in Trump’s policy towards Venezuela, moving from engagement back to sanctions due to political pressure. The halt could exacerbate the country’s recession and humanitarian situation, reducing vital revenue for the Maduro government.
The United States has mandated Chevron to cease its operations in Venezuela within one month, impacting the cash-strapped government in Caracas. Currently, Chevron exports approximately one-quarter of Venezuela’s crude production, crucial for the revenue of the Maduro administration. The U.S. Treasury has described this deadline as essential but industry experts consider it an unlikely target due to logistics.
This decision marks a significant change in Trump’s approach to Venezuela, shifting from a previous strategy of “maximum pressure” during his first term, where sanctions were prevalent, to attempting engagement during his second term. Initially, Trump approved a deal for the release of U.S. citizens, indicating diplomatic intentions, but following backlash from Florida Republicans, he reversed course and criticized Maduro’s government for failing to conduct fair elections.
Experts believe that ceasing Chevron’s exports could plunge Venezuela deeper into recession and exacerbate the ongoing emigration crisis. This development would severely diminish the Venezuelan government’s foreign reserves, potentially cutting $150-200 million per month from an already strained budget. Vice President Delcy Rodriguez criticized the U.S. policy as detrimental to the Venezuelan populace.
The oil market reacted calmly to the news, coinciding with OPEC’s decision to increase production. However, Chevron’s stock has seen a decline of around 2.8% over the week. Historically, Venezuela’s output has decreased from 3.5 million barrels per day to just over one million, severely impacting the nation’s GDP, which fell by 80% from 2014 to 2021, due to low oil prices and sanctions. Notably, this action does not affect European companies like Eni, Repsol, and Shell, who also operate in Venezuela.
In summary, the U.S. directive for Chevron to halt operations in Venezuela poses a substantial challenge for the Maduro government, curtailing vital revenue streams. Trump’s policy shift highlights the complexities of U.S.-Venezuelan relations, moving from engagement back to sanctions amidst political pressures. The anticipated economic impact on Venezuela can lead to further humanitarian crises and challenges for the nation’s stability.
Original Source: www.kpvi.com
