Chevron Resumes Venezuela Oil Exports Amid US Sanctions Waiver; Strategic Shift in Energy Policy

US oil giant Chevron is poised to restart crude exports from Venezuela, following a renewed sanctions waiver from the US Treasury. CEO Mike Wirth disclosed today that oil shipments would recommence in August, marking a significant development in the oil company's involvement in the South American country's oil sector.

Wirth highlighted that while the immediate financial impact on Chevron's bottom line may be limited, this move represents a vital step towards recouping debts. He affirmed Chevron’s commitment to adhere strictly to US sanctions. The company’s operations in Venezuela had been limited to essential maintenance after a prior sanctions waiver, General License 41, was canceled during the Trump administration.

The renewed license emerged amid negotiations with Washington, alongside a controversial deportation of 252 migrants to a prison in El Salvador from the US. This political backdrop underlines the complex interplay of international relations influencing Chevron’s activities in Venezuela.

Chevron maintains a minority stake in four joint ventures with PDVSA, Venezuela's state oil company. These partnerships account for approximately a quarter of Venezuela's crude output. Despite previous constraints, Venezuela sustained its oil production, with 90% of PDVSA's June deliveries destined for China. Concerns have been voiced by certain US politicians about the increasing "Chinese influence" and the necessity for the US to leverage sanctions in favor of domestic corporations.

This recent development is seen as a politically significant easing of the US's stringent "maximum pressure" sanctions on Venezuela's oil industry, originally implemented in 2017. Since then, these sanctions have encompassed financial restrictions, export bans, and additional measures aimed at crippling Venezuela's oil revenue.

US officials have indicated that the reactivation of Chevron's Venezuelan operations does not equate to potential revenue gains for the Venezuelan state via taxes or royalties. Instead, fiscal responsibilities remain with the joint ventures. Venezuelan officials, including Interior Minister Diosdado Cabello, have denied claims that Chevron could operate in the country without financial obligations, asserting that the terms remain confidential.

Other international energy corporations such as Repsol from Spain and Eni from Italy are reportedly seeking similar permissions from Washington to reestablish their operations in Venezuela, having previously exited due to the sanctions regime.

In this new operational framework, Chevron is expected to manage oilfield activities and arrange the sale of its output separately from PDVSA. Analysts cite requests from Nicolás Maduro's government for this arrangement, suggesting it deviates from previous agreements where Chevron handled all sales before transferring proceeds to its Venezuelan counterpart.

This agreement may not alleviate Venezuela's challenges in the foreign exchange market. The details of Chevron’s arrangement with PDVSA under General License 41 have not been fully disclosed, yet the company was a notable supplier of foreign currencies to Venezuelan banks’ exchange platforms, prompting speculation about its role in settling owed taxes and royalties.

The Venezuelan bolívar has seen significant depreciation in recent months as its exchange rate against the US dollar has surged by 244% over the past year, contributing to inflationary pressures. The Venezuelan Central Bank has not released inflation statistics since October 2024.

The restart of Chevron's Venezuelan exports signifies a critical juncture not only for the company’s strategy in high-risk markets but also for US energy policy and its geopolitical considerations in Latin America. As this relationship evolves, other energy firms may look to Chevron’s example as they navigate the complex landscape of sanctions and economic opportunities in Venezuela.