Caracas Chronicles

Now it’s official.

The Trump administration is forcing Chevron to wind down its four joint ventures with PDVSA within 30 days. The measure, outlined in the newly issued regulation (General License 40A) shortens the original six-month timeline set under the now-revoked General License 40.

“One month is a very short period for an orderly wind-down,” according to a person familiar with the industry. It is not clear whether Chevron will be allowed to load and ship Venezuelan oil in March, or if cargoes will be halted immediately.

The U.S. has not officially removed private authorizations granted to the likes of Eni, Repsol, Maurel & Prom and Reliance, but these companies are also likely to see their permissions revoked soon, according to energy expert Francisco Monaldi. The Treasury probably won’t do that in public since those companies don’t operate under a public license.

The rollback is signaling a return to the 2019-2021 sanctions era, when Venezuela was forced to offload its crude at discounts on the black market, leading to significant revenue losses. Another question is whether the U.S. will also block the import of refined products such as diluents, which are crucial for sustaining operations in the Orinoco Belt—home to Venezuela’s extra-heavy crude. If that happens, Maduro would likely turn to Iran to get access to these products, a process that “is going to take time,” warns Monaldi.

As reported by Axios, the announcement comes after three Republican House members—Mario Diaz Balart, Carlos Gimenez and Maria Elvira Salazar—suggested they wouldn’t support a Republican budget resolution that was passed last week if Trump didn’t slash the U.S. oil deal with Venezuela. The decision probably caught many off guard, even in the Trump cabinet, which is probably the reason why OFAC took five days to outline wind-down instructions for Chevron.

Supporting the removal of Chevron’s license is currently illegal in Venezuela under the Simón Bolívar Law, which states that any action in support of unilateral sanctions is treason. Next, we’ll have to watch out for attempts from Maduro & Co. to weaponize Trump’s decision against dissidents in the country.