US Orders Chevron to Cease Venezuela Operations, Impacting Economy
The US government has ordered Chevron to halt operations in Venezuela within 30 days, marking a sharp policy shift from Trump’s administration. This move threatens Venezuela’s economy, heavily reliant on oil revenues, and could lead to new waves of emigration. Critics have condemned the decision as detrimental to the Venezuelan populace, despite minor market responses.
On a recent Tuesday, the United States mandated that Chevron cease its operations in Venezuela within one month. This directive poses a significant challenge for the financially struggling Venezuelan authorities, as Chevron contributes nearly 250,000 barrels of crude oil daily, essential to the revenue stream of Nicolás Maduro’s government. Industry experts have criticized the 30-day deadline as unrealistic for such a large-scale operational halt.
This announcement marks a notable shift in former President Donald Trump’s strategy towards Venezuela, which has historically been viewed as a geopolitical adversary. During his initial term, Trump enforced a stringent policy of “maximum pressure,” imposing sanctions and curtailing US oil companies’ activities in the region. However, upon his return to office, Trump initially appeared willing to engage in diplomatic talks with Maduro, even facilitating the release of American citizens in exchange for the acceptance of Venezuelan deportees.
Under pressure from Republicans in Florida advocating for a return to supporting pro-democracy factions, Trump reversed course, accusing Venezuela of failing to conduct fair elections and violating their agreement. Analysts warn that the cessation of Chevron’s operations could further deteriorate Venezuela’s economy, potentially leading to widespread recession and mass emigration from the country. The loss of these exports could strip away an estimated $150-200 million monthly from Maduro’s already limited foreign reserves.
Venezuelan Vice President Delcy Rodriguez criticized the new US stance, stating, “The new US government is trying to hurt the Venezuelan people.” She expressed that this could result in higher fuel prices and further exacerbate the suffering of the populace. The oil markets responded lightly to the news, finding stability following OPEC’s decision to increase production, although Chevron’s stock price experienced a decline of approximately 2.8% over the past week.
Historically, Venezuela was capable of producing 3.5 million barrels of oil daily; current production, however, is down to just over one million barrels. Between 2014 and 2021, the nation endured an 80% reduction in GDP, largely attributed to plunging oil prices and stringent US sanctions. Notably, other European companies such as Eni, Repsol, and Shell, which also operate in Venezuela, are not affected by this recent directive.
In conclusion, the US government’s ultimatum to Chevron significantly impacts Venezuela’s oil-dependent economy. This decision reflects a strategic shift in President Trump’s policies that could lead to dire economic consequences for Maduro’s regime. As Chevron halts its operations, Venezuela stands on the brink of further recession and an increased humanitarian crisis, while also facing potential international diplomatic ramifications.
Original Source: www.france24.com
