The U.S. has instructed Chevron to cease operations in Venezuela within one month, a move that threatens the revenue stream for the Maduro government. This marks a shift in Trump’s Venezuela policy from engagement back to a harder stance, responding to political pressure. Experts warn this could result in recession for Venezuela, with substantial loss in foreign reserves.

The United States has ordered Chevron to cease its operations in Venezuela within one month, a directive that could significantly impact the financially-strapped Venezuelan government. Currently, Chevron is responsible for nearly a quarter of the country’s oil exports, which are crucial for President Nicolas Maduro’s administration. The Treasury Department’s ultimatum has raised concerns among industry experts regarding its feasibility, with some deeming the timeline impractical.

This decision marks a notable departure from prior U.S. policy towards Venezuela under Donald Trump, who had enforced stringent sanctions during his first term aimed at applying maximum pressure on the Maduro regime. However, upon taking office again, Trump appeared to pursue diplomatic avenues, evidenced by actions such as facilitating a deal for the release of U.S. citizens held in Venezuela.

Nevertheless, following significant pushback from Florida Republicans advocating for support of pro-democracy initiatives, Trump reverted to a harsher stance, criticizing Venezuela’s electoral integrity. Economic analysts warn that the cessation of Chevron’s exports could lead Venezuela towards recession and exacerbate the ongoing exodus of its citizens.

The anticipated loss of revenue, estimated between $150-200 million monthly, could severely deplete Venezuela’s already dwindling foreign reserves. Vice President Delcy Rodriguez remarked on the action’s detrimental effects, suggesting that it would ultimately harm the Venezuelan people. Despite this, oil markets did not react drastically, continuing to absorb the implications of an OPEC production increase.

Venezuela’s oil production has declined drastically from 3.5 million barrels a day in previous years to approximately one million currently. Economic conditions have deteriorated, with the country’s GDP plummeting by 80% from 2014 to 2021 due to a combination of low oil prices and U.S. sanctions. It is noteworthy that European companies such as Eni, Repsol, and Shell, which also operate in Venezuela, are not affected by this latest measure.

The U.S. government’s order to Chevron to halt its operations in Venezuela presents a significant challenge for the Maduro administration, which relies heavily on oil revenue. The immediate financial implications could lead to increased economic difficulties and further emigration from Venezuela. This shift in policy underscores the complexities of U.S.-Venezuela relations, especially given the historical context of sanctions and recent diplomatic efforts under Trump’s renewed administration.

Original Source: www.france24.com

Related posts:

U.S. Orders Chevron to Cease Operations in Venezuela Amid Policy Shift Trump Reverses Oil Concessions to Venezuela Amid Unmet Conditions Trump Revokes Chevron’s Operating Permit in Venezuela, Complicating Economic Recovery U.S. Orders Chevron to Halt Venezuela Operations Within 30 Days