The U.S. has ordered Chevron to halt operations in Venezuela within 30 days, severely affecting the cash-strapped Maduro government. This shift in policy by Donald Trump significantly contrasts his previous approach of engaging with Venezuela. Experts warn that the cessation of Chevron’s oil output could lead to a recession in Venezuela and exacerbate the ongoing refugee crisis.
The United States has mandated that Chevron cease its operations in Venezuela within a month, significantly impacting the financially strained Venezuelan government led by Nicolás Maduro. Chevron, which is responsible for about 25% of Venezuela’s oil production, generates critical revenue essential for the Maduro administration.
The U.S. Treasury Department’s recent directive requires Chevron to halt its oil extraction within thirty days, a timeline industry analysts deem unfeasible. This directive marks a notable deviation in Donald Trump’s approach toward Venezuela, a country historically antagonistic to the United States, particularly compared to his first term’s policy of ‘maximum pressure’ through sanctions.
While initially seeking engagement with Maduro, including facilitating a deal for the release of American citizens, Trump faced backlash from Florida Republicans favoring support for opposition parties. Amidst pressures related to domestic budget issues, Trump shifted his stance last month, accusing Venezuela of failing to uphold electoral commitments.
Experts have warned that the cessation of Chevron’s operations could trigger a recession in Venezuela, exacerbating the existing refugee crisis. Additionally, the expected revenue loss of $150-$200 million monthly would severely deplete Venezuela’s already limited foreign reserves.
Venezuelan Vice President Delcy Rodriguez claimed, “The new US government is trying to hurt the Venezuelan people,” asserting that this decision would lead to heightened fuel prices. The oil markets remain largely unaffected, following OPEC’s announcement to boost production, though Chevron’s stock has dipped by approximately 2.8% in the past week.
Venezuela’s oil output has plummeted from 3.5 million barrels a day to just over 1 million, a consequence of declining oil prices compounded by severe U.S. sanctions that have contributed to an 80% drop in GDP between 2014 and 2021. Notably, European firms like Eni, Repsol, and Shell continue their operations in Venezuela, unaffected by the recent U.S. sanctions.
In summary, the U.S. government’s directive for Chevron to discontinue its Venezuelan operations within one month poses significant economic challenges for the Maduro administration. The abrupt change in Trump’s policy, fueled by political pressures, could lead to a recession and worsen the humanitarian situation in Venezuela. While oil markets have not reacted dramatically, Chevron’s shares have experienced a decline, highlighting the complex dynamics of international relations and energy politics. Overall, the impact of these sanctions reflects the ongoing geopolitical tensions between the U.S. and Venezuela, emphasizing the intricate relationship between energy markets and global diplomacy.
Original Source: www.rnz.co.nz
