The White House may still let Chevron (CVX) operate in Venezuela for a while longer after intensive lobbying in Washington by the company’s CEO, Mike Wirth.
According to the Wall Street Journal, the Trump administration is considering a plan to extend Chevron’s Biden-era exemption that allows it to pump oil from the South American nation, which is under tight U.S. sanctions. The newspaper says the White House could extend the license and impose tariffs or some other kind of financial penalties on any nations that buy oil from Venezuela.
CVX Lobbying Blitz
It follows a lightning round of lobbying by Wirth, who met Trump along with other oil executives on Wednesday. Wirth has also spoken with Secretary of State Marco Rubio and Treasury Secretary Scott Bessent in recent days, according to the WSJ report.
Trump said in late February that he would end CVX’s operations in the country and earlier this month the Treasury Department moved formally to rescind Chevron’s license to do business in Venezuela, giving the company 30 days to wind down operations as the administration sought to pressure President Nicolas Maduro to accept deported illegal migrants.
White House Volte-Face
This marked a change in stance after White House special envoy Richard Grenell struck a deal with Maduro in late January to accept deportees on the understanding that Chevron’s license would remain. It’s thought that Trump changed his view after pressure from Florida lawmakers, including Rubio, who has taken a hard line on the Maduro regime.
On Tuesday, Rubio threatened to impose additional sanctions on Venezuela if it did not accept its citizens being repatriated from the United States. “Unless the Maduro regime accepts a consistent flow of deportation flights, without further excuses or delays, the U.S. will impose new, severe, and escalating sanctions,” he said in a post on X.
Chevron and Wirth have long argued that its exit from the country would simply open up a space for Russia and China to exploit. Chevron’s exemption produces around 240,000 barrels per day in the country, accounting for about a quarter of the country’s total output and about a third of its exports.
Joe Biden’s administration granted a license to Chevron to expand its Venezuela business in 2022, while broader oil sanctions on the country were lifted in October 2023. However, President Maduro backtracked on his commitment to hold free and fair elections, leaving the U.S. to reimpose oil sanctions in April last year.
Is CVX Stock a Buy?
Chevron’s stock has a consensus Strong Buy rating among 14 Wall Street analysts, based on 11 Buy and three Hold recommendations assigned in the past three months. The average CVX price target of $176.64 implies about 7% upside from current levels.
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