US Allows Chevron To Pump Oil In Venezuela

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.
• While the move could add supply to the global oil market ahead of a Dec. 5 deadline for tightened sanctions on Russian petroleum, a US senior administration official denied that the Treasury’s Office of Foreign Assets Control issued the limited license "in response to energy prices."
• The authorization comes as the Venezuelan government and opposition coalition announced Saturday an agreement on humanitarian aid and further negotiations. The pact focused on the country's 2024 elections amid ongoing economic and political turmoil.
• US officials had previously offered to ease sanctions and free some Venezuelan nationals from US prisons contingent on continued talks and agreements to strengthen democracy in the South American country.
• This decision also allows US oil service providers Halliburton Co, Schlumberger Ltd, Baker Hughes Co, and Weatherford International Plc to resume operations. Chevron is prohibited from doing business with Iran as well as Russian-owned or controlled companies in Venezuela under the new license.

Sources: Treasury, Financial Times, Politico, CNN, FOX News, and Time.

Narratives

• Republican narrative, as provided by Daily Caller. 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, as provided by The New York Times. While solving Venezuela's complex crisis still requires a lot of effort, recent developments show that all parties are finally in the right direction. Allowing Chevron to resume pumping oil in Venezuela is not 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.

Predictions