U.S. Extends Chevron’s Export Wind-down as Tariffs on Venezuelan Oil Loom
The U.S. has extended Chevron’s oil export wind-down in Venezuela until May 27, following President Trump’s tariff announcement. The 25% tariff applies to countries purchasing Venezuelan oil or gas. This move, intended to exert pressure on oil consumers, coincides with geopolitical tensions and changes in production plans by other energy firms.
On Monday, the United States extended Chevron’s timeline to wind down oil exports from Venezuela by an additional two months. This decision follows President Donald Trump’s announcement that countries purchasing oil or gas from Venezuela would incur a 25% tariff on their trade with the U.S. The wind-down license, originally granted to Chevron in 2022, has now been extended until May 27, allowing the company to export oil solely to the United States.
President Trump initially mandated a 30-day period for Chevron to cease operations, citing President Nicolas Maduro’s inadequate progress on electoral reforms and the repatriation of migrants. Chevron has not yet provided a response to inquiries regarding this extension. Trump’s announcement of the “secondary tariff,” effective April 2, aims to exert different pressures on consumers of Venezuelan oil, although the methods of enforcing this tariff remain uncertain.
The rationale behind the tariff stems from Trump’s assertion that Venezuela has sent numerous individuals to the U.S. who he characterizes as possessing a “very violent nature.” Following the news of the tariff, benchmark crude oil futures saw an increase of approximately 1.5%. Earlier, Trump invoked the 1798 Alien Enemies Act to deport members of the Venezuelan gang Tren de Aragua, bypassing the typical immigration judicial process.
China remains the foremost consumer of Venezuelan oil, receiving approximately 503,000 barrels per day in February, which comprised 55% of total Venezuelan oil exports. Past U.S. tariffs on imports of certain Venezuelan oil types resulted in reduced volumes reaching Chinese buyers, prompting state-run PDVSA to implement price discounts to maintain sales. Other notable consumers of Venezuelan oil include Spain, Italy, Cuba, and India, with U.S. imports expected to conclude by May 27.
In related news, Trump’s tariff announcement closely followed Shell Plc’s plans to commence natural gas production at Venezuela’s Dragon gas field, with exports intended for Trinidad and Tobago anticipated to start in 2026, ahead of the previously scheduled 2027 timeline.
The U.S. extension of Chevron’s wind-down license illustrates the ongoing geopolitical complexities surrounding Venezuelan oil exports. The imposition of tariffs, particularly the secondary tariff announced by President Trump, aims to restrict oil transactions while raising concerns over enforcement. As Venezuela’s oil market navigates these challenges, shifts in consumer dynamics and potential changes in production strategies become critical points for stakeholders in the industry.
Original Source: www.cnbc.com
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