The Amuay refinery, one of the three largest in the world, is located in the state of Falcón, in western Venezuela. Photo: Génesis García.
Guacamaya, March 6, 2025. The U.S. government, led by Donald Trump, formally announced the revocation of the license allowing Chevron to operate in Venezuela. The decision, made official on March 4 and effective in 30 days, marks the end of a strategic relationship that had enabled the U.S. oil company to export over 200,000 barrels per day of Venezuelan crude.
This move not only impacts international markets but also raises questions about the economic dynamics and stability of both countries. However, other policies of the Trump administration and the technical characteristics of Venezuelan crude also come into play.
The complete halt of imports could significantly affect U.S. refineries specifically designed to process heavy Venezuelan crude. Additionally, countries like Russia and China have increased their influence in Venezuela, which might prompt the U.S. to maintain some level of influence to counterbalance this situation.
The cessation of oil trade between Venezuela and the U.S. would have profound implications for both nations, affecting their economies and geopolitical relations.
Timeline of Chevron’s Exit from Venezuela
At a press conference on January 31, Donald Trump reaffirmed his stance against allowing oil purchases from Venezuela, a position he had expressed 10 days earlier, just hours after his presidential inauguration. The U.S. leader argued that oil transactions with Venezuela would strengthen the regime of Nicolás Maduro, which he considers illegitimate.
Since his first term (2017-2021), Trump implemented a series of sanctions against Maduro’s government, including those targeting the state oil company PDVSA. These measures aimed to reduce Caracas’ revenue to exert political pressure.
Despite these decisions, and even under the Biden administration (2021-2025), the U.S. continued importing Venezuelan oil due to the crude’s specific characteristics and the country’s energy needs. In October 2023, Biden lifted some sanctions on Venezuela’s energy sector following agreements between Maduro’s administration and the opposition to hold presidential elections.
General License 41, issued in November 2022, automatically renewed Chevron’s activities every six months and allowed Maduro’s government to earn an additional $740 million in oil sales, according to a Bloomberg source. Other sources contacted by Reuters also indicated that restricted licenses for companies like Repsol, Eni, Maurel & Prom, Reliance, and Shell would be extended to continue operating in Venezuela.
“I was very surprised to see Biden agree to buy a large amount of oil from Venezuela because Venezuela was on the verge of freeing itself from the dictator. And when that happened, it revived him,” said Trump, criticizing his predecessor’s policies. However, Trump assigned his Special Presidential Envoy, Richard Grenell, the task of visiting Venezuela to discuss essential matters.
The meeting between Grenell and the Venezuelan government on January 31 concluded with the release of six detained U.S. citizens and an apparent agreement for Venezuela to receive illegal migrants captured in U.S. territory. Although the continuity of General License 41 was threatened, it proceeded with automatic renewal after the meeting.
However, on February 26, Donald Trump announced the revocation of concessions granted by Biden in 2022, which had allowed Chevron to recover billions in pending debt in Venezuela. Trump claimed that Maduro failed to comply with agreements related to free elections and the deportation of dangerous migrants. The measure seeks to reverse what he called a strategic error by the previous administration.
U.S. Business Sector at Risk
A key figure in U.S.-Venezuela trade relations has been U.S. businessman Harry Sargeant III, owner of Global Oil Terminals and a diversified group of companies in the oil and energy sector. The conglomerate is authorized to acquire and export asphalt from Venezuela until at least 2026, according to Bloomberg.
The revocation of Chevron’s license also jeopardizes Venezuelan asphalt trade, a resource valued for its quality and essential for U.S. infrastructure. In January 2025, exports of AC-30, a type of asphalt cement, reached 525,000 barrels, a 112% increase from the 243,000 barrels exported in December, according to a report from the Paraguaná Refining Center operated by PDVSA.
This increase reflects the strategic importance of Venezuelan asphalt, even amid political tensions. Initially, Sargeant was thought to play a central role in organizing the meeting between Richard Grenell and Nicolás Maduro, though oil experts consulted by Voice of America later downplayed his prominence in this regard.
The uncertainty generated by sanctions and the lack of clear rules in trade agreements between the two countries could severely disrupt the flow of AC-30, impacting U.S. construction projects. For businessmen like Sargeant, the situation underscores the need for stable government policies, as volatility poses significant risks to investments in strategic sectors.
Global Impact on the Oil Market
The U.S. decision has also influenced discussions within OPEC+, which has agreed to proceed with a planned increase in oil production starting in April, the first since 2022. This increase of 138,000 barrels per day aims to stabilize global crude prices, which have fluctuated between 70 and 82 per barrel in recent weeks, according to Reuters.
While the production increase seeks to mitigate upward pressures, the organization has left open the possibility of adjusting this decision based on market conditions. This reflects the complexity of the current energy landscape, influenced by U.S. sanctions on major producers like Venezuela, Iran, and Russia, as well as Trump’s proposed tariffs on Canada, Mexico, and China.
In the context of the tariff dispute, it is relevant to note that Chinese state refineries, including ChemChina and PetroChina’s Guangdong Petrochemical, imported a total of 865,000 metric tons (5.5 million barrels) of Venezuelan crude after Biden lifted sanctions in 2023, according to S&P Global data.
On the other hand, the trade relationship between Venezuela and India in the oil sector has been significant, especially under U.S. sanctions. Venezuelan state oil company PDVSA and India’s Reliance Industries resumed offshore crude exchanges last December, an agreement suspended due to U.S. sanctions.
Although the outlook remains uncertain, as renewed sanctions could limit these operations again, both PetroChina Guangdong Petrochemical and Reliance Industries have played crucial roles in Venezuelan crude trade. The Chinese state company is one of the main buyers of Venezuelan oil, while the Indian firm is a strategic ally and a key source of cash revenue for the Caribbean nation.
While non-Western nations and companies are forced to act cautiously in the face of renewed restrictions, they may strengthen energy ties with Venezuela. By diversifying their supply sources, they aim to ensure energy security, accessing heavy and economical Venezuelan crude that their refineries are equipped to process.
Economic Repercussions for Venezuela
Venezuela has historically depended on oil exports as its primary source of income. According to Ecoanalítica, 85% of Venezuela’s income comes from crude exports, reaching $15.4 billion in 2024, with 30% contributed by Chevron and other international partners.
The recent revocation of Chevron’s license by the Trump administration could result in a loss of 4to4to4.5 billion for Venezuela, affecting currency market stability. Chevron contributed $2.4 billion in 2024, providing significant relief to the Central Bank, Ecoanalítica noted.
Although inflation closed the year at 48%, it could spike to 80% due to further depreciation and the need to print more bolivars, according to Síntesis Financiera. Additionally, limited access to foreign currency would restrict private sector growth, as noted by Luigi Pisella, head of Conindustria.
In response, the Venezuelan government has activated a “Plan for Absolute Productive Independence,” aiming to diversify the economy and reduce oil dependence in response to U.S. sanctions. However, no official details of this strategy have been provided.
During her speech at India’s Energy Week on February 11, Vice President and Minister of Hydrocarbons Delcy Rodríguez called Venezuela’s exclusion from the global oil market “absurd,” highlighting that it limits export opportunities and economic development.
In February 2025, before Chevron’s license revocation, Venezuelan oil exports reached their highest level since November, averaging 934,465 barrels per day.
Costs and Consequences for the U.S.
The U.S. would also face significant implications, as it has been a major buyer of heavy Venezuelan crude, essential for certain refineries on its territory. The disruption of Venezuelan supply would force the U.S. to seek alternatives in other markets, potentially increasing refining costs and affecting energy supply stability.
Moreover, the costs of opening a new well are notably lower in Venezuela than in major U.S. geological formations. Reserves in the Orinoco Belt are at shallower depths and do not require techniques like fracking.
Thus, capital and operational expenses per barrel of crude in the Orinoco Belt would be lower, between 12 and 15. In comparison, costs in the Permian Basin range from 18 to 25, in Bakken from 22 to 27, and in Eagle Ford from 23 to 33. Only heavy crude in Alberta, Canada, is comparable. It is more expensive, but advanced technology allows for a higher percentage of available reserves to be recovered.
Francisco Monaldi, director of the Latin American Energy Program at Rice University’s Baker Institute (Houston), suggested in statements to BBC Mundo that President Trump might be using Chevron’s license as a negotiation strategy, applying pressure before seeking agreements.
In an interview with the Financial Times, Chevron CEO Mike Wirth stated that the U.S. company’s withdrawal from the Venezuelan market would open the door for greater dominance by Chinese and Russian firms. He also warned that this decision would further harm Venezuela’s already fragile economy, potentially intensifying migration to the U.S.
