Trump to revoke Venezuela oil licenses
On 26 February, President Donald Trump said he intended to remove General License 41, which allows Chevron to operate in Venezuela despite sanctions.
The following day, State Secretary Marco Rubio said that he would be issuing guidance to the Treasury Department on how to end all oil and gas authorisations, which include multiple “specific licenses” for North American, European and Indian companies.
On Sunday, 2 March, the Office of Foreign Assets Control (OFAC) said that it is “preparing to take action to wind down General License 41 and other specific licenses as appropriate. We will issue additional guidance to assist implementation concurrent with any changes to the authorization(s).”
Although Trump had said on various occasions that he was considering whether to maintain GL 41, the announcement was considered unexpected by many. Richard Grenell, the Presidential Envoy for Special Missions, had visited Venezuela on 31 January to meet with Maduro. From the visit, Grenell was able to return six American prisoners home and to resume deportation flights—one of Trump’s main objectives.
Why did Trump do this?
According to sources in Capitol Hill, removing the Chevron license was a condition by the Florida congressional delegation to vote in favour of the Reconciliation Bill, which reforms the federal budget.
On Monday, Axios published an exclusive saying that three Republican Cuban-American House Representatives were behind the move—Carlos Gimenez, Mario Diaz-Balart, and Maria Elvira Salazar. Trump would have said "they're going crazy and I need their votes” to confidants when he was about to announce his decision.
It is unclear where this will leave Trump’s priority of mass deportations, especially given his intention to end Temporary Protected Status for hundreds of thousands of Venezuelans. If there is no agreement with Maduro, there will be nowhere to repatriate them—Guantanamo Bay or small Central American countries do not have the capacity.
What is the impact of the Chevron license?
In January 2025, joint ventures with a participation by Chevron contributed 242,000 bpd, or 23%, out of a total 1,068,000 bpd, according to PDVSA’s own monthly report. Repsol, Maurel et Prom, and Eni, which also have OFAC licenses, produce an additional 83,000. In all, they produced 30% of PDVSA’s total output that month.
Other companies with licenses are BP and Shell, which are developing offshore gas fields on shared Venezuela-Trinidad waters. They have recently asked for extensions from OFAC for up to 15 years, as they seek assurances before making their respective final investment decisions.
Production would not automatically fall to zero in all these joint ventures. However, it would dwindle without the management, talent and technologies that boosted output in the last two years. The operations would be taken over by PDVSA completely, and could then be transferred to other private companies via Production Sharing Agreements (SPAs).
A group of U.S. oil companies have been buying Venezuelan crude for their East Coast refineries, including Valero, Phillips 66, ExxonMobil, and Chevron itself. In 2024, they were importing an average of 230,000 barrels per day from Venezuela, reaching a peak of 300,000, according to the Energy Information Administration.
In the last year, companies from Iran, China, Russia, Turkey and Algeria have been eyeing up new upstream opportunities in Venezuela. While the Venezuelan government has preferred U.S. and European investments, it may start making it easier for “Eastern” countries to enter the market.
In China’s case, it has been private companies seeking deals, including “Anhui Erhuan Petroleum” and “China Concord Petroleum.” As for Iran, its state-owned companies have been servicing refineries, but this time around NIOC would be inspecting oil fields, at least since November.
The licensed companies are also a vital source of hard currency, as they need to buy bolivars to pay taxes, salaries and suppliers. They buy them from private banks, and a large part trickles down to the larger economy. Without their foreign exchange operations, the bolivar would take another hit, likely triggering higher inflation and further impoverishment—with an accompanying migration wave.
How is the Maduro government responding?
The response from Caracas has been measured, as long as there are open channels of communication with Washington, DC. The government of Nicolás Maduro is still trying to cooperate with the Trump administration on migration, as it also presents repatriation flights as a victory, as well as other issues.
In a communiqué on 26 February, Vice President and Oil Minister Delcy Rodríguez said that Trump’s decision was “damaging and inexplicable.” She added that “in reality, it is hurting the United States, its people, and its companies, also questioning property rights in the U.S.”
