US Allows Chevron To Pump Oil In Venezuela

    Photo: Getty Images [via The Wall Street Journal]

    The Facts

    • On Saturday, the US Dept. of the Treasury granted Chevron Corp. a six-month license authorizing the US company to resume oil extraction and exports from its oil fields under joint ventures with Venezuela's state-owned company, Petroleos de Venezuela, S.A. (PdVSA). The license prevents PdVSA from receiving profits from Chevron's oil sales.

    • The relaxation of oil sanctions represents a departure from the Trump-era policies against Venezuela's leader Nicolás Maduro. Since 2019, Chevron was allowed to maintain its assets in Venezuela but not to export crude oil or expand operations in the country with the world's largest known oil reserves.

    The Spin

    Republican narrative

    It's a bad policy for the Biden admin. to allow other companies to pump oil in Venezuela amid its efforts to push the US oil industry offshore. Domestic shale oil is much more environmentally friendly than heavy Venezuelan crude oil, yet Washington prefers to favor an authoritarian regime over allowing new drilling leases in the US.

    Democratic narrative

    While solving Venezuela's complex crisis still requires a lot of effort, recent developments show that all parties are finally moving in the right direction. Allowing Chevron to resume pumping oil in Venezuela isn't related to soaring energy prices as the US is focused on restoring democracy — this is why the US can revoke it if Maduro breaks his commitments.

    Nerd narrative

    There's a 50% chance that Venezuela will produce at least 821k barrels of oil in 2022, according to the Metaculus prediction community.

    Political split



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