Oil pumpjacks extracting crude oil. File photo
Oil prices have risen more than two points after US President Donald Trump announced the revocation of US-based oil multinational Chevron’s operations license in Venezuela. At the closing of European markets on Thursday, February 27, Brent oil prices increased by $1.53 to reach $74.06 per barrel, while West Texas Intermediate (WTI) rose by $1.64 to reach $70.26 per barrel.
This rebound comes after prices hit their lowest levels on December 10, highlighting market volatility amid ongoing tensions in Eastern Europe and globally.
The revocation of Chevron’s license means the company will no longer be able to export Venezuelan crude to the United States. To date, the US-based oil company has exported approximately 240,000 barrels per day (bpd) from Venezuela, representing a quarter of Venezuela’s current oil production.
The US government’s decision to revoke Chevron’s license aims to reduce Venezuela’s total crude oil production, but it also negatively impacts Chevron itself as well as the global energy market.
According to analysts at TD Cowen, Chevron’s exit from Venezuela may prompt the Organization of Petroleum Exporting Countries (OPEC+) to increase production to compensate for the potential drop in Venezuelan supply. However, if OPEC+ decides against increasing production, crude oil prices could continue to rise, particularly affecting US refineries, which are already seeking alternatives such as Colombian, Ecuadorian, and Guyanese crude.
Venezuela’s VP Condemns Trump’s Revocation of Chevron License
PDVSA and Chevron analyze alternatives
Meanwhile, sources close to discussions between Chevron and the Venezuelan state-owned oil company PDVSA told British news agency Reuters that the license revocation could lead to negotiating a new agreement for Chevron to export Venezuelan crude oil to other countries. This scenario opens the possibility for Venezuela to diversify its markets, although US sanctions could limit available options.
So far, the US Treasury Department has not published details on the terms of the license revocation nor established a deadline to reduce Venezuelan oil exports.
Following Trump’s announcement, Venezuelan President Nicolás Maduro declared that no country or threat will intimidate Venezuela and he stated that “the will of the people of Venezuela will safeguard their independence, their freedom and their maximum happiness.”
Venezuelan Interior Minister Diosdado Cabello criticized the license revocation during his program Con el Mazo Dando and condemned the Venezuelan extremist opposition for promoting it.
Cabello emphasized that the sanctions not only affect Venezuela but also the US economy, and he praised the resistance of the Venezuelan people in the face of adversity.
Trump’s decision comes in a complex global scenario, where OPEC+ is debating whether to increase oil production in April or to maintain it at current levels. US and allies’ sanctions against Venezuela, Iran and Russia, along with the war in Ukraine, have created a landscape of uncertainty that markets are monitoring closely.
Additionally, US economic growth slowed in the fourth quarter, while concerns about tariffs on various countries and their impact on prices have added pressure to the global economy. Meanwhile, unemployment benefit claims in the US rose more than expected last week.
(Telesur)
Translation: Orinoco Tribune
OT/SC/DZ
