U.S. President Donald Trump has announced that any country that buys oil or gas from Venezuela will pay a 25% secondary tariff on trades with the United States, Reuters reported on Monday, with Trump claiming that Venezuela has sent “tens of thousands” of people to the U.S. who have a “very violent nature.

Earlier this month, Chevron Corp. (NYSE:CVX) received a 30-day notice from the Trump administration to wrap up its operations in Venezuela. The deadline, set for April 3, provides the company only 30 days instead of the normal six-month wind-down period. Since 2022, Chevron has been allowed to operate in Venezuela as an exception to U.S. sanctions, exporting crude to the United States. According to Secretary of State Marco Rubio and other foreign-policy hawks, Chevron has been providing a financial lifeline for Maduro’s regime to enrich itself and suppress civil rights. Venezuela produced about 20% of Venezuela’s oil in 2024, close to Maduro’s goal of 1 million barrels per day. Chevron is the only major oil producer with a waiver to operate in Venezuela despite Washington’s sanctions against President Nicolás Maduro’s regime.

Last year, the United States Office of Foreign Assets Control (OFAC) eased some sanctions on Venezuela but retained sanctions on PdVSA. OFAC has issued a new license allowing certain transactions related to the export or re-export of liquefied petroleum gas (LPG) to Venezuela until July 8, 2025.  However, transactions with Petróleos de Venezuela, S.A., the Venezuelan state-owned oil and natural gas company in which PdVSA has a 50 percent or greater interest, remain prohibited under the sanctions imposed by various executive orders.

Venezuela’s crude oil production has declined sharply from 3.2 million b/d in 2000 to 735,000 b/d in September 2023 mainly due to sanctions and poor maintenance; in contrast, Argentina’s crude output has been increasing with Argentine President Javier Milei vowing to shake up the system.

By Alex Kimani for Oilprice.com

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