The Trump administration has given Chevron (CVX) 30 days to wind down all its activities in Venezuela, revoking its license to operate there. This decision reverses the policy under Joe Biden, which allowed Chevron to produce oil and maintain operations. It also cuts off a major financial line to President Nicolás Maduro’s government. Chevron now has until April 3 to cease its operations in the sanctions-hit country.
Notably, Tuesday’s decision does not affect non-U.S. oil companies operating in Venezuela, such as Repsol, ENI, and Shell. However, industry sources suggest the Treasury Department may later revoke their authorizations.
Chevron Could Face Logistical Hurdles
This move follows President Trump’s February 27 announcement ending Chevron’s permit to operate in Venezuela. The administration cited the Maduro government’s failure to return migrants quickly and hold fair elections. Critics argue the vote was rigged to keep Maduro in power.
This decision is a big setback for Chevron, which remained in Venezuela while other oil firms left after former President Hugo Chávez nationalized oil assets in 2007. With the 30-day deadline, Chevron must shut down its four joint ventures by early April. This could create legal and logistical challenges, although large oil firms often have contingency plans.
Venezuela Oil Output Takes a Hit
Chevron’s departure from Venezuela is expected to significantly impact Venezuela’s oil production. The company produces about 240,000 barrels per day, more than a quarter of the country’s total output.
Experts warn that Chevron’s exit could hurt Venezuela’s weak economy, with some saying it may shrink by 7.5%. Since oil exports make up a big part of Venezuela’s income, a drop in production could severely reduce government funds and public services.
Is Chevron a Good Stock to Buy Now?
Overall, Wall Street has a Strong Buy consensus rating on CVX stock, based on 12 Buys and three Holds. The average CVX price target of $176.47 implies 16.10% upside from current levels, with the stock having risen 6% in the last 12 months.
