U.S. sets one-month deadline for Chevron to end Venezuela operations

(Bloomberg) – The U.S. Treasury followed through on President Donald Trump’s pledge to stop Chevron Corp. from pumping and selling Venezuelan crude, delivering a major blow to Nicolas Maduro’s autocratic regime. 

The department set a deadline of April 3 for Chevron to wrap up its operations in Venezuela, giving the company just 30 days instead of the normal six-month wind-down period. The narrow time frame is an unexpected blow to Maduro, significantly ratcheting up pressure on him to quickly make a deal with Trump. 

Chevron shares fell 1.3% after the decision was announced. The measure reverses the Biden administration’s decision to allow the U.S. oil major to ship heavy Venezuelan crude to refineries on the Gulf Coast. 

Chevron, which has a joint-venture with Venezuela’s state oil company, has ramped up production in recent years to supply about 20% of the nation’s overall output. That has provided a significant economic uplift to the economy, helped tame sky-high inflation and injected hard currency into the country’s private sector. 

But critics, especially Florida Republican lawmakers, argued the US company was providing an economic lifeline to Maduro even after he reneged on pledges for democratic reforms last year. Trump has also criticized Maduro for failing to accelerate the pace of flights of migrants from the US quickly enough. 

“We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement,” Trump wrote in a social media post. Secretary of State Marco Rubio followed up saying he will provide “foreign policy guidance” to “terminate all Biden-era oil and gas licenses that have shamefully bankrolled the illegitimate Maduro regime.” 

Venezuela has said the U.S. decision would be “harmful” and cause “damage to the U.S., its people and its companies.” 

Soon after his inauguration, Trump sent a delegation to Caracas led by advisor Rick Grenell in an attempt to start direct talks with Maduro. The meeting was seen as a fresh start after years of tense standoff. It resulted in the release of six American prisoners and the restart of deportation flights. It’s not clear if oil sanctions were discussed. 

The presence of the Houston-based oil giant brought much-needed transparency to Venezuela after a period of sanctions imposed during Trump’s first term. In those days, the country relied on ghost cargoes and small traders, resulting in billions of dollars of lost revenue for state-run Petroleos de Venezuela SA between 2020 and 2022.