The United States has ordered Chevron to cease operations in Venezuela within a month, a decision that poses a threat to the country’s economic stability and the Maduro administration. This marks a shift in U.S. policy from engagement back to a more confrontational approach, prompted by internal political pressures. Experts warn that this may exacerbate Venezuela’s economic crisis and increase migration.
The United States government has mandated Chevron to cease its operations in Venezuela within a one-month period, a significant decision that will adversely impact the financially strained government of Caracas. Chevron currently plays a crucial role by exporting approximately 250,000 barrels of crude oil each day, which is vital for the revenue of Nicolas Maduro’s regime. However, officials from the Treasury Department have indicated that this directive is, according to industry experts, an unrealistic demand given the timeframe.
This directive represents a sharp departure from Donald Trump’s earlier stance regarding Venezuela during his initial presidential term, characterized by a strategy termed “maximum pressure,” involving extensive sanctions against the Maduro government and limiting operations of US oil companies. After his recent return to office, Trump appeared to initiate outreach efforts to engage with Maduro, facilitating an agreement to allow the release of American citizens in exchange for Venezuelan acceptance of migrant deportees from the United States.
Intense pressure from Republican factions in Florida, advocating for support of democratic parties struggling in Venezuela, prompted Trump to reconsider his approach last month, declaring that Venezuela had failed to conduct fair elections as agreed. Experts project that the cessation of Chevron’s operations could lead to an economic recession in Venezuela, exacerbating the migration crisis as many individuals may flee the country due to the worsening economic conditions.
The implications of this decision would dramatically deplete the already limited foreign reserves of Maduro’s administration, resulting in a monthly loss estimated between $150 and $200 million. Vice President Delcy Rodriguez criticized the new US policy, suggesting that it is detrimental to the Venezuelan populace and will elevate fuel prices. In the commodities markets, oil traders responded with moderate calm, especially in light of recent OPEC decisions to boost production.
Additionally, Chevron’s stock has suffered a decline of approximately 2.8 percent over the past week. Once producing 3.5 million barrels daily, Venezuela’s output has plummeted to just over one million barrels due to previous sanctions and dwindling oil prices, leading to an 80 percent GDP decline between 2014 and 2021. Meanwhile, European companies such as Eni, Repsol, and Shell, which have operations in Venezuela, are reportedly unaffected by this latest development.
In summary, the United States has ordered Chevron to withdraw from Venezuela within 30 days, a decision that could severely impact the country’s already fragile economy and the Maduro government’s funding sources. This directive marks a significant shift in U.S. policy, moving away from earlier engagement attempts towards a more stringent stance reflecting prevailing political pressures. The potential economic fallout from this action may lead to increased hardship for Venezuelans and further destabilization within the region.
Original Source: www.kpvi.com
