US Orders Chevron to Halt Venezuela Operations Amid Policy Shift
The US has ordered Chevron to stop operations in Venezuela within 30 days, impacting the Maduro government financially. This marks a shift from former President Trump’s initial cooperative approach to a renewed stance against the regime amidst political pressures. Loss of Chevron’s exports could significantly harm Venezuela’s economy, leading to increased emigration. The oil market reflects stability despite Chevron’s stock decline, with European firms unaffected by such sanctions.
The United States has mandated energy corporation Chevron to cease its operations in Venezuela within 30 days, a directive that significantly impacts the financially strained Venezuelan regime. Currently, Chevron is responsible for nearly a quarter of Venezuela’s crude oil production, which is a crucial source of revenue for President Nicolas Maduro’s government.
This decision represents a notable shift in former President Donald Trump’s strategy towards Venezuela, a country historically at odds with the US. During his first term, Trump enforced a stringent policy of sanctions aimed at the Maduro administration, impeding US oil companies’ activities. However, in his recent term, he briefly sought a cooperative approach, facilitating a deal involving the release of US citizens in exchange for the acceptance of Venezuelan deportees.
Pressure from Floridian Republicans advocating for support of democracy and opposition groups in Venezuela, particularly concerning electoral integrity, prompted Trump to pivot once more. He recently criticized Maduro’s government for not conducting fair elections, contrary to previous agreements, leading to the current ultimatum for Chevron.
Industry experts predict that the loss of Chevron’s exports could plunge Venezuela into a deeper recession, exacerbating the already critical migration crisis. The cessation of operations could deny the Maduro government approximately $150 to $200 million monthly, further depleting its foreign reserves. Vice President Delcy Rodriguez has condemned the US decision, stating, “The new US government is trying to hurt the Venezuelan people.”
The oil market’s reaction to this announcement remained stable, influenced by OPEC’s decision to boost production. Nonetheless, Chevron’s stock has markedly dropped by nearly 2.8 percent over the past week. Despite once producing 3.5 million barrels of oil daily, Venezuela’s output has plummeted to just over one million barrels, fueled by a combination of factors including sanctions and declining oil prices, resulting in a staggering 80 percent GDP reduction from 2014 to 2021. European oil firms, including Eni, Repsol, and Shell, have not faced similar restrictions concerning their operations in Venezuela.
In summary, the US government’s directive to Chevron to halt operations in Venezuela signals a significant alteration in foreign policy that may exacerbate the already precarious economic situation in the country. With Venezuela’s revenue vastly reliant on oil, experts warn of dire repercussions, including a potential recession and intensified emigration. As the Venezuelan government’s resources dwindle, calls for concern from government officials amplify the impact of US sanctions on the nation’s populace.
Original Source: www.rnz.co.nz
