The U.S. has ordered Chevron to wind down its operations in Venezuela within a month, severely impacting the Maduro government’s finances. This shift in policy reflects Trump’s changing approach, moving from engagement back to stringent measures as Venezuela fails to adhere to democratic promises, potentially leading to increased economic crises and migration.
On Tuesday, the United States mandated Chevron to cease its operations in Venezuela within one month, a decision that poses significant challenges for the already financially strained government in Caracas. Currently, Chevron is responsible for one-quarter of Venezuela’s oil output, which is critical to the revenue of Nicolas Maduro’s administration.
The U.S. Treasury Department instructed Chevron to halt its oil production within 30 days, a timeline that industry experts have deemed impractical. This directive marks a notable change in former President Donald Trump’s approach to Venezuela, shifting from his previous policy of ‘maximum pressure’ characterized by sanctions and restrictions on U.S. oil firms.
Initially in his second term, Trump attempted to engage with the Maduro regime, facilitating the release of U.S. detainees in exchange for accepting deportees. This conciliatory stance faced backlash from Florida Republicans advocating for support of pro-democracy movements in Venezuela which have struggled against electoral manipulation.
Under pressure from Congress amid a challenging budget discussion, Trump recently reversed his conciliatory approach, declaring that Maduro’s government had failed to uphold commitments regarding fair elections. Analysts posit that the cessation of Chevron’s exports could lead Venezuela into recession and exacerbate emigration.
The loss of Chevron’s operations could significantly diminish Venezuela’s foreign reserves, estimated to decrease by $150-200 million monthly. In response, Vice President Delcy Rodriguez commented, “The new US government is trying to hurt the Venezuelan people. It is a self-inflicted blow that is going to increase fuel prices.”
While oil markets reacted moderately to the announcement, following a decision by OPEC to boost oil production, Chevron’s share price has declined by approximately 2.8%. Venezuela’s oil production has plummeted from 3.5 million barrels per day to just over one million, despite its vast reserves. Factors contributing to this decline include low oil prices and stringent U.S. sanctions, which led to an 80% drop in GDP from 2014 to 2021. Notably, European companies such as Eni, Repsol, and Shell were not affected by this latest U.S. action.
In summary, the recent U.S. mandate for Chevron to cease operations in Venezuela signifies a strategic shift in American foreign policy under Donald Trump, impacting the Venezuelan economy and its government significantly. With Chevron’s contributions being essential for Venezuela’s revenue, this directive could exacerbate the nation’s economic woes and enhance emigration. Furthermore, it demonstrates the ongoing complexities of U.S.-Venezuela relations, where political and economic strategies intersect.
Original Source: www.france24.com
