President Donald Trump’s decision to revoke Chevron’s license to operate in Venezuela may be felt well beyond the South American country’s borders.
The move — announced by Trump in a Truth Social post last week — will be a major blow to Venezuela. Chevron produces about a fifth of Venezuela’s crude annually, according to analysts at the Rystad Energy research firm, and losing the ability to export to the U.S. will be a blow to the country’s already floundering economy.
For Chevron, it represents a pause in more than 100 years operating in Venezuela and an inability to recoup debts it is owed by Venezuela’s state-owned oil company, Petróleos de Venezuela SA.
Prices for oil in the U.S. could also rise, and prices at the pump could climb in regions that depend on getting gasoline from Gulf Coast refiners that use Venezuela’s heavy crude. Benchmark U.S. oil was trading for less than $70 a barrel on Monday, and the industry will be closely watching to see where it goes from here.
“It’s the last stalwart of a U.S. supermajor in Venezuela going away,” said Tom Liskey, senior regional manager for Latin America with the Enverus energy analytics firm, about Trump’s decision on Chevron. “At this point, there’s more questions than answers as to what could happen.”
Bill Turenne, a spokesperson for Chevron, said the company was looking into Trump’s comments.
“We are aware of the president’s announcement and are considering its implications,” he wrote Friday in a statement. “Chevron conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by the U.S. government.”
Losing its ability to produce in Venezuela is the latest in a string of headlines about the second-largest U.S. oil major.
Chevron announced last year that it was moving its headquarters from San Ramon, California, to Houston amid ongoing tension over regulations in the Golden State. Chevron already has thousands of workers in Texas’ largest city and uses downtown office space formerly occupied by Enron.
Turenne said the lower cost of living, Texas’ business-friendly environment and proximity to oil and gas infrastructure were major considerations in a move meant to help with efficiency and collaboration.
Then last month, the company told employees it would shed as much as 20 percent of its workforce before the end of 2026 — following downsizing announcements at companies such as BP and Shell.
Turenne has said that decision was made to simplify Chevron’s organizational structure and position it for “stronger long-term competitiveness.” He said the layoffs were in line with an earlier announcement that the company is aiming to cut $2 billion to $3 billion in costs by the end of 2026.
Trump’s announcement about Venezuela, meanwhile, is another blow to Chevron’s South American plans at a time when investors are interested in the growth prospects and production outlook at big oil and gas companies amid price uncertainty.
“Two things are probably the key themes for Chevron right now,” said Allen Good, director of equity research with Morningstar financial services. “There’s concern over long-term growth and the near-term weakness in oil prices.”
Chevron in October 2023 announced a $53 billion deal to acquire Hess — part of a wave of mergers and acquisitions among major oil companies — only for rival Exxon Mobil to challenge one of the largest parts of that deal. At issue is a stake in a massive oil field off the coast of Guyana, which is just east of Venezuela.
The Stabroek Block could have as many as 11 billion barrels of oil equivalent in reserves. Hess holds a 30 percent stake in the Guyana block, while Exxon has a 45 percent stake and operates the project and infrastructure.
An Exxon spokesperson pointed POLITICO’s E&E News to a December 2024 corporate update during which Exxon CEO Darren Woods said Hess’ stake presents an opportunity for Exxon.
“We’ve developed the value of that asset. We have a right to consider the value of that asset in this transaction and a right to then take an option on it,” Woods said in the December call. “There is an option value here. We think it’s in the best interests of all our shareholders to maintain that value option. Why would we give that away because one of the partners constructed a deal with another third party?”
In response to questions from E&E News, Chevron pointed to an interview with CEO Mike Wirth in an interview on CNBC’s “Squawk Box” on Jan. 31. During the interview, Wirth said he’s confident that Hess and Chevron will prevail in arbitration and that Chevron will be able to take Hess’ stake in Guyana.
“It has taken longer than we would have liked,” Wirth said of the deal. “But we’ve got a line of sight to resolution later this year.”
‘A real hunger’
In Venezuela, Chevron has weathered the former Hugo Chávez regime and remained the only U.S. oil companies to continue operating in the country after Chávez nationalized the country’s oil industry and mandated that international companies sign onto joint ventures with national oil company PDVSA as minority partners.
Exxon and ConocoPhillips, for example, pulled out of the country in 2007 after refusing to obey Venezuela’s oil nationalization rules, said Schreiner Parker, managing director for Latin America at Rystad Energy.
“Chevron has been able to maintain the relationship” with Venezuela’s oil and gas company and its government “because of the nature of their assets,” Parker said.
While Chevron produces a sizable portion of Venezuela’s crude, it’s a small part of its overall portfolio. Chevron’s South American assets, including Venezuela, were just 5.2 percent of its international upstream liquids production last year, according to the company’s 2024 earnings report.
That lasted until April 2020, when the first Trump administration told Chevron to “wind down” its production in Venezuela as that administration ratcheted up economic sanctions against the regime of President Nicolás Maduro, Parker said.
Then-President Joe Biden approved a license in 2022 to allow Chevron to produce Venezuelan crude that could be sent to the U.S. during negotiations with the Maduro government — after Maduro restarted talks with opposition groups and made pledges to allow independent candidates to run in Venezuela’s 2024 election. That license, known as General License 41, was issued by the Treasury Department.
Even though many of those pledges fell to the wayside before, during and after the 2024 Venezuelan election, the Biden administration continued to reauthorize Chevron’s license to operate in Venezuela every six months.
Venezuela’s de facto opposition leader recently defended the Trump administration’s decision to halt oil licenses.
Part of the reason Biden may have restarted the import of Venezuelan oil, Parker said, is the type of crude that comes from Venezuela. It’s known as heavy crude, and that is a key type of oil processed by refineries along the U.S. Gulf Coast. Those refineries are largely unable to work with the lighter crude oil that comes from areas like the Permian Basin.
“There’s a real hunger from the Gulf Coast refining community to get heavy crude. They traditionally got it from Venezuela; when they didn’t get it from Venezuela, then they got it from Russia,” Parker said.
He noted that Russian imports to the U.S. came to a halt after April 2022 after Russia invaded Ukraine in February that same year.
“Part of calculus is that importing up to 200,000 barrels a day of Venezuelan heavy crude just prior to the U.S. election could help stabilize gas prices or put a little bit of a ceiling on gasoline prices,” Parker said.
In December 2024, the most recent month for which the U.S. Energy Information Administration has data, the United States was importing an average of 296,000 barrels a day from Venezuela.
Consumer implications
Liskey with Enverus said a rise in crude oil prices after Trump’s Venezuela announcement may have been a knee-jerk reaction. But he said there will be clear impacts to U.S. markets.
Cutting off oil supplies from Venezuela could cause prices for U.S. gasoline to rise, especially throughout the Gulf Coast, according to Liskey.
And higher prices could lead to political implications for Trump, who campaigned on pledges to lower prices at the pump.
On Monday, AAA reported an average price of $3.097 per gallon of regular gasoline in the U.S. That was down from $3.346 per gallon a year earlier, the automobile club said. But more pricing pressure could be on the way.
“We’re moving into peak driving season. Everyone’s going to be hitting the road, and the government has promised a better economy,” Liskey said.
Observers also will be watching gasoline prices in places like the Midwest and Rocky Mountains, where refineries depend on Canadian heavy crude supplies that could be affected by tariffs proposed by the Trump administration.
In response to questions from E&E News, the White House press office pointed to the fact that Venezuela is not a top supplier of imported crude to the U.S.
According to the Energy Information Administration, the top importers are Canada, Mexico, Saudi Arabia, Iraq and Colombia — which largely send heavy crude to the U.S.
The White House also said that Gulf Coast refineries have started processing lighter crude as well, which the EIA noted in 2018.
Parker said it’s surprising to see Chevron defend its stake in Venezuela when so little of its portfolio is produced there and operating in the country presents unique challenges.
Countries such as Colombia that produce heavier crude could help fill part of that gap, Liskey said. Russia, too, may return as a source with heavy crude, he said, now that Trump and President Vladimir Putin have begun to discuss what Secretary of State Marco Rubio said last month are “incredible opportunities that exist to partner with the Russians.”
But those potential imports are far from certain, Liskey said.
“Almost every world leader in this equation between Russia, the U.S. and Venezuela are very unpredictable,” he said. “There are so many aspects to the equation that you just cannot define yet.”
