The Trump administration is set to compel more companies to cease operations in Venezuela, increasing pressure on President Maduro following Chevron’s mandated exit. Additional firms like Etablissements Maurel & Prom SA face similar orders, potentially impacting Venezuela’s struggling economy significantly. Key officials harbor differing views on the strategy, leaving room for potential adjustments.
The Trump administration is preparing to require additional companies to halt their operations in Venezuela, intensifying pressure on President Nicolas Maduro following a recent order for Chevron to cease operations. Sources indicate that companies like French oil producer Etablissements Maurel & Prom SA and an asphalt firm owned by Florida tycoon Harry Sargeant have been informed they have 30 days to stop operations, contingent on the revocation of their waivers to operate without breaching sanctions. The U.S. Treasury could initiate this process as early as Friday.
Halting these operations will significantly impact Venezuela’s already struggling economy, putting further pressure on Maduro amid Trump’s push for potential democratic reforms and increased acceptance of Venezuelan migrants from the U.S. Earlier this week, the Treasury Department mandated Chevron to conclude its activities in Venezuela by April 3rd, a timeline significantly shorter than the standard six-month wind-down period.
Venezuela’s economy is heavily reliant on oil, and companies like Chevron, alongside smaller firms permitted to operate, provide vital contributions to its growth, especially as the state oil company suffers from extensive underinvestment. The Trump administration has multiple officials with differing opinions on handling Venezuela, leaving room for potential changes in strategy regarding oil companies’ operations.
Other foreign firms, including Spain’s Repsol SA and Italy’s Eni SpA, are also awaiting decisions from the U.S. on whether their waivers will be revoked. Notably, joint operations between Chevron and Petroleos de Venezuela SA are estimated to have contributed to a quarter of the Maduro regime’s revenues in 2023 and 2024, according to consultancy Ecoanalítica. The Finance Observatory, an opposition-led research group, projects that the absence of Chevron could lead to a 7.5 percent contraction of Venezuela’s economy this year.
Trump adviser Rick Grenell met with Maduro in January to resume dialogue, resulting in the release of six U.S. prisoners and the recommencement of deportation flights. Since this meeting, 166 Venezuelan migrants have been sent back to Venezuela from the U.S., with the latest flight arriving in Caracas on February 20th. Despite the implications of losing Chevron, Maduro has downplayed the situation, asserting that “output will not even fall one liter or barrel.”
The Trump administration is increasing pressure on Venezuela by possibly mandating the cessation of operations by more firms, further threatening the nation’s economic stability. With Chevron already ordered to halt its activities, analysts predict a significant contraction in Venezuela’s economy if further companies are forced to withdraw. The geopolitical landscape remains fluid, with discussions for reforms continuing amidst these sanctions.
Original Source: www.business-standard.com
