US Administration Moves to Compel Additional Companies to Exit Venezuela
The Trump administration may soon require more companies to discontinue operations in Venezuela, following pressure on President Maduro. Companies like Chevron are facing imminent deadlines to exit, which could exacerbate Venezuela’s economic crises. This strategic move aims to influence forthcoming negotiations on democratic reforms and migrant acceptance. While Maduro downplays the impact of these sanctions, significant economic consequences are anticipated.
The Trump administration is preparing to compel additional companies to cease their operations in Venezuela, intensifying the pressure on President Nicolas Maduro. Following the directive for Chevron Corp. to halt its Venezuelan activities, authorities have notified companies such as Etablissements Maurel & Prom SA and a Florida asphalt company to terminate their operations within 30 days after the revocation of their operational waivers. This decision could be formalized by the US Treasury as early as Friday.
The cessation of these companies’ activities would significantly impact Venezuela’s struggling economy, further challenging Maduro’s regime while President Trump seeks agreements related to democratic reforms and the acceptance of more migrants from the United States. The Treasury previously directed Chevron to conclude its operations in Venezuela by April 3, a substantially shorter timeline than the typical six-month phase-out period.
Venezuela’s economy is heavily reliant on oil, with Chevron and several smaller companies playing pivotal roles as contributors to the country’s economic activity amid the degradation of the state oil company due to years of neglect. There exists considerable divergence among Trump’s advisers regarding the strategy towards Venezuela, suggesting potential last-minute changes allowing continued operation by oil companies.
Several foreign enterprises, including Repsol SA from Spain and Italy’s Eni SpA, are also waiting to learn whether the US will revoke their operational waivers. The financial ramifications of Chevron’s exit could be profound, as joint operations between Chevron and Petroleos de Venezuela SA are projected to account for a quarter of the regime’s total revenue for 2023 and 2024, with potential economic contraction reaching approximately 7.5% this year, as per analysis from Ecoanalítica.
In recent diplomatic engagements, Trump adviser Rick Grenell met with Maduro, facilitating direct discussions that resulted in the release of six US detainees and the resumption of deportation flights; 166 Venezuelan migrants have been returned to their home country since then. In response to potential sanctions, Maduro has attempted to minimize the anticipated effects of Chevron’s exit, asserting, “output will not even fall one liter or barrel.”
The United States, under the Trump administration, is intensifying pressure on Venezuela by directing companies, including Chevron, to cease operations. This move is expected to significantly impact Venezuela’s already struggling economy while potentially reshaping diplomatic relations between the US and Venezuela. As key foreign companies await developments regarding their operational status, the economic stability of Maduro’s regime remains under serious threat due to the crucial contributions of the oil industry to Venezuela’s revenue.
Original Source: www.livemint.com
