Will the Trump administration revoke the Chevron License?
While President Donald J. Trump has rarely commented on the situation in Venezuela, his few remarks about the country consistently suggest that the oil licenses issued by OFAC are problematic and that the U.S. does not need to buy Venezuelan oil, as I explained earlier. On February 18, 2025, President Trump reiterated this message, stating that the Chevron license is "under review."
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In November 2022, OFAC issued General License n° 41, authorizing Chevron to undertake oil production and exports through PDVSA′s joint ventures (JVs), in which the international oil firm is a minority shareholder. The License was granted to reward the agreement between Maduro and the Unitary Platform to "unfreeze" billions of dollars in blocked assets to finance humanitarian aid. The agreement was never implemented, but nevertheless, the License remains.
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When the Biden administration issued the new and broad License to reward the signing of the Barbados agreement -General License n° 44—the lesson was learned, and the License was granted only for six months. When Maduro decided to ignore the Barbados agreement, the License expired, although OFAC issued individual licenses, including those in favor of Maurel & Prom and Repsol, that mimic the Chevron license.
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Those general and individual licenses granted the minority shareholders of JVs the right to produce and export oil. In the case of Chevron, exports are limited to the U.S. However, the Venezuelan oil legislation expressly prohibits minority shareholders from undertaking oil activities. To circumvent this prohibition, PDVSA signed new oil contracts covered by the Anti-Blockade Law, the legislation approved by the now defunct constituency assembly that, violating the Constitution, concentrates functions in the Executive, ignoring checks and balances. Because of this, the new oil contracts, including the "Productive Participative Contracts" or CPPs, are covered by a confidential veil.
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Oil licenses come with both advantages and disadvantages. On the one hand, they have enabled traditional international oil companies to increase production and exports under more transparent conditions than those in the black market. Primarily driven by Chevron and following OPEC's secondary sources, production reached a milestone in December 2024, hitting 910,000 barrels daily. On the other hand, the CPPs are too weak to attract the private investments necessary for the oil industry's recovery. At the same time, the decline of the rule of law and state collapse further obstruct production. More critically, the confidentiality rule imposed by the Anti-Blockade Law worsens the lack of transparency and contributes to rising corruption. This is a significant point to consider, given that the government take from oil activities covered by licenses could be estimated between $2.1 billion and $3.2 billion annually (only considering royalties and other related incomes).
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This government take conflict with the agreements made between the Trump administration and Maduro. Given the existing institutional framework, billions in oil revenues covered by OFAC licenses could potentially support predatory policies and criminal groups, heightening the hemispheric risks associated with the Venezuelan crisis.
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Another often-overlooked aspect is that, sooner or later, oil deals governed by licenses will clash with PDVSA's defaulted debts. The oil companies with licenses are the sole creditors being compensated because, amidst the current lack of transparency, it appears that 20% of oil output is allocated to settle PDVSA's obligations with the minority shareholders.
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The rule of law and state collapse prevent the steady recovery of the Venezuelan oil industry, reducing its strategic relevance. According to the EIA, Venezuelan oil exports to the U.S. account for approximately 3.5% of total U.S. imports. To increase those volumes, international oil firms need more than a License.
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Thus, it’s not unexpected that the U.S. government views Venezuelan oil as irrelevant to energy security. While this does not imply that oil licenses will be revoked, they are deemed insignificant regarding energy security. Nonetheless, they may play a part in the ongoing negotiations between the Trump administration and Maduro, which are centered on migration and security issues arising from the criminal organization Tren de Aragua.
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Revoking licenses, especially General License n° 41, is challenging. This is why the License is set for automatic renewal every six months on the first of each month. This setup favors a gradual wind-down instead of an abrupt halt in operations. For example, if OFAC chooses not to renew the License before March 1, Chevron would have six months to reduce its operations. However, Chevron’s assets and personnel remain vulnerable even with this gradual approach. Following recent expropriation actions targeting the thriving shrimp industry, Maduro continues to pursue aggressive policies.
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Another factor to consider is that canceling oil licenses will not enhance the conditions within the sector. Ultimately, Maduro might attract new oil operators under the Anti-Blockade Law, potentially maintaining exports via the black market. A 20% savings will compensate for any reduction in production, as PDVSA will avoid the need to offset its debt to minority shareholders.
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Two conclusions can be drawn. First, Venezuelan oil will have limited importance until substantial institutional reforms are implemented to boost production, a challenging task given the current political landscape. Second, the oil's significance will depend on the broader agenda for Venezuela, which is still being developed