The U.S. has instructed Chevron to cease operations in Venezuela within one month, greatly affecting the nation’s economy reliant on oil revenue. This signifies a shift in Trump’s foreign policy, moving away from initial engagement back to sanctions amidst pressure from Republican lawmakers. Experts warn this will worsen Venezuela’s economic conditions, potentially leading to a recession and increased emigration.
The United States has mandated Chevron to cease its operations in Venezuela within one month, posing a significant challenge for the economically struggling Venezuelan government in Caracas. Chevron is responsible for nearly a quarter of the country’s one million barrels of oil produced daily, generating crucial revenue for President Nicolas Maduro’s regime. This directive from a Treasury Department unit has been deemed unrealistic by industry experts, indicating a stark shift in U.S. policy towards Venezuela under President Donald Trump.
During his initial term, President Trump adopted a “maximum pressure” strategy against Venezuela, implementing sanctions and constraining the activities of U.S. oil firms. However, upon resuming office, he initially sought a more conciliatory approach, including negotiating arrangements to secure the release of American citizens in exchange for the acceptance of migrant deportees from Venezuela. His envoy even met with Maduro, which drew backlash from Republican leaders in Florida.
Amidst a recent budgetary crisis, Trump reversed his position, declaring that Venezuela had not fulfilled its commitments towards ensuring democratic elections. Experts forecast that a reduction in Chevron’s exports could plunge Venezuela into an economic recession and exacerbate the already significant outflow of citizens from the country. The cancellation of operations is projected to result in a loss of $150-200 million monthly in foreign reserves for Maduro.
Venezuelan Vice President Delcy Rodriguez criticized the U.S. administration, stating, “The new US government is trying to hurt the Venezuelan people. It’s a self-inflicted blow that is going to increase fuel prices.” Oil markets were relatively unaffected following the announcement, coinciding with a decision by OPEC to boost production. Nevertheless, Chevron’s shares have declined by approximately 2.8% in the past week.
Venezuela’s oil production has plummeted from a peak of 3.5 million barrels per day to just over one million barrels, despite possessing the largest oil reserves worldwide. Between 2014 and 2021, the country saw its GDP shrink by 80%, largely due to low oil prices and stringent U.S. sanctions. Notably, this recent mandate does not extend to European firms such as Eni, Repsol, and Shell, which also maintain operations in Venezuela.
In summary, the U.S. government’s ultimatum to Chevron to halt operations in Venezuela marks a decisive pivot in foreign policy under President Trump. This shift may severely impact Venezuela’s economy, exacerbating the humanitarian crisis by cutting vital revenue streams for the Maduro regime. The situation raises significant concerns about the future stability of Venezuela and the pressures faced by its citizens amidst ongoing sanctions and economic hardship.
Original Source: www.kpvi.com
