Former US President Donald Trump has declared his intention to revoke a crucial license that allowed Venezuela to export oil to the United States, despite existing sanctions.
This decision poses a significant economic challenge for the Venezuelan government, as the license facilitated joint ventures between Venezuela’s state-owned oil company, PDVSA, and the US energy giant Chevron, which was a vital source of revenue in dollars.
Trump provided two main reasons for this revocation: the failure of Nicolás Maduro’s administration to fulfill “electoral conditions” and its slow progress in repatriating “violent criminals” who were deported from the US.
Venezuela has strongly condemned the decision, labeling it “damaging” and warning that it could lead to an increase in migration to the United States.
Trump announced this on his Truth Social platform, stating, “I am hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022.”
He did not clarify which concessions he was referencing, but the only pertinent license issued that day was from the US Treasury, allowing Chevron to “resume limited natural resource extraction operations in Venezuela.”
Under this agreement, Chevron was allowed to engage in joint ventures with PDVSA but was barred from making payments like taxes or royalties to the Venezuelan government.
Chevron spokesperson Bill Turenne confirmed in a statement that the company “conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by the US government.”
Chevron’s Chief Executive Mike Wirth recently warned in an interview with the Financial Times that if the company had to withdraw from Venezuela, it would create opportunities for increased Russian and Chinese influence in the region. He also expressed concern that worsening economic conditions in Venezuela could lead to more migration to the US.
The Venezuelan opposition has consistently pushed for the revocation of the license, claiming it gives Maduro’s government a vital financial boost. However, the Biden administration granted the license in 2022 to promote free and fair elections in Venezuela.
This license remained active even after the electoral council, aligned with the government, declared Maduro the winner of the July 2024 presidential election. This result was disputed by the opposition and not recognized by the US and several other countries, which instead acknowledged Maduro’s opponent as the rightful winner.
Trump’s announcement followed a meeting between his envoy, Richard Grenell, and Nicolás Maduro in Caracas. During this visit, Grenell facilitated the release of six US citizens held in Venezuela and reached an agreement for the Venezuelan government to repatriate deported nationals from the US.
In a post on Truth Social, Trump criticized Maduro’s government for not fulfilling its obligations, stating, “The regime has not been transporting the violent criminals that they sent into our Country (the Good Ole’ U.S.A.) back to Venezuela at the rapid pace that they had agreed to.”
Consequently, he announced the termination of what he referred to as the “ineffective and unmet Biden ‘Concession Agreement,'” effective March 1.
Venezuelan Vice President Delcy Rodríguez cautioned that previous US sanctions have resulted in increased migration from Venezuela to the US and predicted a similar outcome from this latest decision.
Trump has prioritized reducing undocumented migration, and this policy change had an immediate effect on oil markets, causing prices to rise by more than 1% on Thursday.