Trump axes Chevron's Venezuela oil license, citing lack of electoral reforms

US President Donald Trump on Wednesday said he was reversing a license given to Chevron to operate in Venezuela by his predecessor Joe Biden more than two years ago, accusing President Nicolas Maduro of not making progress on electoral reforms and migrant returns.

In a post on Truth Social, Trump said he was "reversing the concessions" of the "oil transaction agreement, dated November 26, 2022."

Trump did not name Chevron in his comments, but Washington granted Chevron a license to operate in Venezuela's oil sector on November 26, 2022. It was the only license the administration issued for Venezuela that day.

"The US government has made a damaging and inexplicable decision by announcing sanctions against the US company Chevron," Venezuelan Vice President Delcy Rodriguez said in a statement posted on Telegram.

She said "these kinds of failed decisions" had prompted migration out of Venezuela.

The White House and the US State Department did not immediately respond to requests for further detail on Trump's comments.

Chevron said it was aware of Trump's post and considering its implications.

Chevron exports about 240,000 barrels per day of crude from its Venezuela operations, over a quarter of the country's entire oil output.

Ending the license means Chevron will no longer be able to export Venezuelan crude. And if Venezuela's state oil company PDVSA exports oil previously exported by Chevron, US refineries will be unable to buy it due to US sanctions.

Since his return to office in January, Trump has repeatedly said the US does not need Venezuelan oil and left open the possibility of revoking Chevron's operating license.

During his first term, Trump pursued a "maximum pressure" sanctions policy against Maduro's government, especially targeting Venezuela's energy business.

After initially easing sanctions to encourage fair and democratic elections, Biden in April reinstated broad oil sanctions, saying Maduro failed to keep his electoral promises. But Biden had left the Chevron license intact, along with US authorizations granted to several other foreign oil companies.

Tax and royalty payments resulting from Chevron's license have provided a steady source of revenue to Maduro's administration since early 2023, a source familiar with Venezuela's oil industry said. The money has lifted Venezuela's economy, especially its oil and banking sectors, which expanded last year.

The government take from oil activities covered by all US licenses, to Chevron and a handful of European companies, is estimated between $2.1 billion and $3.2 billion annually, only considering royalties and taxes, said Jose Ignacio Hernandez from consultancy Aurora Macro Strategies.

US Energy Secretary Chris Wright said on Wednesday after Trump's comments that the US is the world's largest oil producer and "small interruptions from other nations" will not affect global supply.

ELECTORAL CONDITIONS 'NOT BEEN MET'

In early February, Trump said Caracas had agreed to receive all Venezuelan migrants in the United States illegally and provide for their transportation back.

That came a day after US envoy Richard Grenell met with Maduro in Caracas and brought six US detainees back.

Trump said in Wednesday's post Maduro had not met "electoral conditions" and that he was not transporting Venezuelans back to the United States at a pace that had been agreed to.

Trump did not detail what he meant by "electoral conditions." Maduro's last two election wins were both disputed by Washington, with Venezuela's opposition saying it won the July 2024 presidential election by a landslide, an assertion backed by the US and other Western countries.

The cancellation of the license proves Trump is on the side of Venezuelans, opposition leader Maria Corina Machado told Trump's son Donald Trump Jr. during an interview on the latter's video and podcast interview show.

"What you just mentioned is proof for me that President Trump is on the side of the Venezuelan people, of democracy, and prosperity of the US and for Venezuela as well," Machado said, adding the question from Trump Jr. was the first she had heard of his father's decision. "This is exactly the path ahead."

The oil concession agreement would be terminated as of the March 1 option to renew, Trump said.

It was not immediately clear what would happen with cargoes of Venezuelan crude currently navigating to US ports or about to depart from Venezuela through the end of the month.

Maduro and his government have always rejected sanctions by the United States and others, saying they are illegitimate measures that amount to an "economic war" designed to cripple Venezuela.

Maduro and his allies have cheered what they say is the country's resilience despite the measures, though they have historically blamed some economic hardships and shortages on sanctions.

When the license was first issued, Chevron was owed about $3 billion by Venezuela. According to the company's debt recovery plan, explained by sources, by the end of 2024 it should have recouped some $1.7 billion as oil output approached an average of 200,000 barrels per day as expected.

Chevron's automatically renewing license allowed it to expand crude output at joint ventures with PDVSA and send some 240,000 bpd to its own refineries and other customers.

Chevron said earlier in February it will lay off up to 20% of its global staff by the end of 2026 as part of an effort to cut costs and simplify the business. Chevron told its employees the company was falling behind competitors and struggled to quickly make decisions.