Trump Administration's Venezuela Policy Reversal Causes Market Turmoil

In a span of less than 24 hours, the Trump administration's latest reversal on Venezuela policy has caused significant turmoil. As disagreements within the White House became public, the fate of Chevron's major oil joint venture in Venezuela was thrown into uncertainty.

The policy flip-flop began on Tuesday when a U.S. official announced that Chevron's oil projects in Venezuela would receive an extension under the existing sanctions waiver set to expire the following week. However, on Wednesday night, the U.S. Secretary of State contradicted this announcement via Twitter, causing a sharp fluctuation in the country's bond prices.

This policy reversal is the latest sign of an internal tug-of-war within the Trump administration over how much pressure to exert on the regime of Nicolás Maduro. Led by Senator Marco Rubio, the "hardliners" advocate for increased sanctions, while another faction seeks to ease restrictions in exchange for cooperation from Venezuela on issues such as immigration.

“The recent flip-flops in Venezuela policy have left investors — frankly, everyone — confused,” said Geoff Ramsey, a senior research fellow at the Atlantic Council. “The question is whether the government can integrate these two positions into a more cohesive ‘good cop, bad cop’ strategy.”

President Donald Trump himself has sent mixed signals. He approved the soon-to-expire sanctions waiver but earlier this year supported Rubio's hardline stance on social media. Earlier this week, the "moderates," led by Special Envoy Richard Grenell, seemed to gain the upper hand. They promised to extend Chevron's sanctions waiver for 60 days in exchange for Venezuela releasing an American veteran.

“If we can make some progress, build some trust, President Trump will approve the extension,” Grenell said on Steve Bannon's “War Room” podcast. “We did that today, so the extension will be approved.”

Venezuela bondholders and those advocating for the lifting of sanctions welcomed the news, but a delegation of congressmen from Florida, where Venezuela is a key election issue, expressed discontent. With the White House needing full Republican support to pass Trump's major tax bill in the House, these lawmakers hold significant bargaining power.

Representative Maria Elvira Salazar of Miami made it clear in a brief interview that she would not support Trump's tax bill if the sanctions waiver extension went through. “The president has made a commitment,” she said.

Rubio's tweet came just hours before the House vote — a bill that Trump had hailed as “the most important piece of legislation in American history!”

When asked about the contradictory statements, State Department spokesperson Tammy Bruce said at a press conference, “There is no confusion. Everyone can have many opinions on any issue, but obviously, we should listen to those who have the power to make an impact and make decisions — and that is, of course, President Trump's directive.”

Grenell declined to comment, and both Chevron and the White House National Security Council did not respond to requests for comment.

“If the Americans want to completely withdraw from Venezuela and not produce anything there, that is their choice,” Maduro said in a podcast. “Companies like Chevron, which have contracts, will be respected because we are people of our word and the law.”

The tension goes beyond Venezuela policy. Grenell had previously vied for the position of Secretary of State (ultimately won by Rubio) and met with Maduro in Caracas before Rubio's first visit to Latin America as Secretary of State in January. Grenell is also responsible for pushing the administration's agenda to persuade Venezuela to accept deportees — a priority for the White House.

When Grenell, as Special Envoy, flew to Antigua to finalize the “hostage for waiver” deal, the official documents needed to extend the sanctions waiver had to be signed by Rubio. As of now, the documents remain unsigned.

Trump ally and right-wing activist Laura Loomer joined the debate, supporting the extension of Chevron's operating permit on social media, siding with Grenell. Loomer and Grenell argue that Venezuela is a key partner in stemming the flow of migrants into the U.S., and revoking Chevron's permit would result in the country's oil resources falling into other hands.

“Why let other countries take over U.S. oil assets and destroy 15,000 American energy jobs?” Loomer responded to Rubio on social media. “I will wait for President Trump to weigh in — he is the decision-maker.”