Caracas Chronicles

Before trying to understand what is happening, let’s gather the facts. In November 2022, the Biden administration granted a license to the U.S.-based oil company Chevron to expand its operations in Venezuela, in exchange for a commitment from Maduro of letting the opposition exist and allow international cooperation in the humanitarian crisis. This, along with a wish for minimally free and fair elections in 2024, was the cornerstone of the Barbados Agreement signed in October 2023, and permitted Chevron, which remained in Venezuela after the first set of sanctions, to sell Venezuelan oil and to do business with local partners such as PDVSA. 

Venezuela oil numbers are murky. While production increase has been steady since Chevron was allowed to operate again, secondary sources reported (OPEC) that in February it was close to 900,000 barrels per day (bpd) and direct sources that it was almost at 1.1 million bpd, a gap of over 100,000 bpd. Chevron-led joint ventures in the country have an average output of 200,000(+) according to Reuters (and growing), providing Maduro with a steady income stream. In theory, the Chevron license (General License 41) doesn’t allow Chevron to pay taxes, royalties or dividends to any Venezuelan entity, which in practice is kind of impossible to implement because the JVs have to comply with local laws. Bloomberg says that Chevron filed millions in taxes in Venezuela in January, and just this month, production at Chevron’s Petropiar project is expected to reach its highest point since 2018, the year before Trump I banned transactions with PDVSA.

The measure is not yet clear. We don’t know yet if it will imply the immediate revocation of General License 41 and Chevron would need to wind down operations immediately, or if it would be granted a six-month transition period until August.

Chevron has said the company is considering the implications of today’s announcements and has conducted its Venezuela operations in compliance with all laws and regulations, including the sanctions framework established by the U.S. government.

That license has been renewing automatically without problem, under the close attention of Venezuela observers, given the role it has in the economy and the subsequent leverage it gave to Washington DC when it came to negotiations with Caracas. While Edmundo González somehow emerged as an acceptable candidate for chavismo, they still refused to let Maria Corina Machado run, ramped up political persecution, and blatantly stole the presidential election on July 28th. All agreements signed in Barbados and elsewhere were dead when Maduro took the oath for another illegitimate mandate on January 10, 2025. Ten days later, Donald Trump returned to the White House, but with an entirely different approach to the Venezuelan case regarding his first administration, and sent an special envoy, Richard Grenell, to Miraflores to strike a deal: U.S. prisoners for Venezuelans detained in the U.S. that had to be deported.

The worst case scenario, incredibly, is not one in which Maduro stays in Miraflores with a normalized relationship with the White House. The really bad place would be limbo. Uncertainty. 

“[Maduro and I] tried to have a conversation where we would have a different relation. We are very clear-eyed about the Venezuelan government and Maduro, but Donald Trump is someone that doesn’t want to do regime change,” Grenell recently said about his visit to Miraflores on January 31st, during which Maduro released six American prisoners and agreed to receive Venezuelan immigrants arrested in the United States. “There’s a reason why Donald Trump’s ambassadors are able to do these things: it’s because of Donald Trump. It’s because he has a credible threat.”

Just yesterday, Mauricio Claver Carone—the special envoy for Latin America, who strongly favoured the maximum pressure policy during Trump’s first administration—said the U.S. was examining what to do with the Chevron license. 

Today, Trump announced—without mentioning Chevron and blaming Biden—that the license was dead and won’t be renewed on March 1st. Delcy Rodríguez seems to have confirmed the news and blamed the Venezuelan opposition, while repeating the myth that sanctions provoked mass migration and humanitarian crisis. 

Apparently, Maduro is not taking away deportees at the speed he agreed with Grenell, so the state he rules is being punished, and the Venezuelan economy along with it. Here is where speculation begins. 

Trump might be changing the stance about Venezuela he revealed since the start of his second term: no regime change but cohabitation; to restore democracy is a Venezuelan, not American, affair; and what matters to him is to stop the influx of mass migration and the (real but exaggerated) menace of the Tren de Aragua gang. 

But Trump might just be pressuring Maduro to comply with whatever he promised in terms of receiving deportees. As he did with Canada and Mexico about trade tariffs, he made a big, sudden, very public threat in order to get something—not precisely a foreign policy switch. 

The election fraud on July 28 is not the reason to revoke the Chevron license. It is purportedly migrants, Trump has stated. Now we have to see what Maduro will do to get that license back. Maduro needs it, as well as the Chevron shareholders; this last factor could have an influence in a pro business administration like Trump’s.  

We are currently in uncertain waters. If the Trump administration is serious about removing the licenses, the measure should be backed with a strategy to remove Maduro quickly. Otherwise, it is likely to be a disaster. 

The worst case scenario, incredibly, is not one in which Maduro stays in Miraflores with a normalized relationship with the White House. The really bad place would be limbo. Uncertainty. A scenario in which Maduro remains in power, and Trump removes the licenses and forgets about the whole thing, cutting foreign aid and with no solution for the Venezuelan migrants in the United States. We’ve said many times and explained how the economic crisis was created by chavismo way before sanctions, but removing the Chevron license right now will have an impact that will be quickly felt in Venezuela’s fragile domestic economy, which has been oxygenated by petrodollars. These are not the conditions of 2019. The worsening of the economic conditions will be blamed on sanctions and this could impact opposition support and migration.

We are at a point in which bluffs can kill.