The Latin American Report # 456

If something can be said in favor of Trump, it is that with him in the Oval Office every day, there are new things to discuss. Until noon yesterday, relations with Venezuela were based on a realistic approach, understanding that Maduro is well entrenched in the Miraflores Palace. Yet early in the afternoon, a new truth from the Republican president announced that as of Saturday, a specific license—issued in November 2022—allowing California-based Chevron to exploit its oil concessions in Venezuela will cease to have effect. Trump pointed to the disputed electoral process and alleged breaches of the agreement to receive deported migrants. I find it difficult to believe that the Venezuelan government intentionally jeopardized the rather comfortable state—assessing the context—in which its relations with Pennsylvania Avenue were in.

That the past elections were murky was no secret to the new U.S. administration, which anyway let Chevron's business in the oil-rich nation continue, allegedly after the intervention of Harry Sargeant III, an influential mogul who, like Trump, is domiciled in Palm Beach, Florida. Sargeant is said to import Venezuelan heavy crude oil for asphalt production. The intention of this move could be to seek “a better deal” with Maduro—which already seemed settled: acceptance of deportees in exchange for stability in the regulatory status quo and forgetting the electoral issue—or to "rectify" the “chart” of the “Venezuela/US” pair in the political market, so that it looks more like the expected dynamics of a White House full of hawkish politicians.

_{Richard Grenell with Maduro at Miraflores. To the right is Jorge Rodríguez, a powerful Chavista official (source).}

An Atlantic Council senior fellow thinks that the West Wing wants a saying in upcoming processes, such as a constitutional reform project or the regional and legislative elections called by the Venezuelan authorities. Considering the facts, it seems a risky bet to go that way. I vote for the second alternative. U.S.-based Venezuelans did not digest the appeasement in the relations. Unlike what happens with the negotiations with distant Russia and Ukraine, the Republican narrative against Western Hemisphere “adversaries” is a critical tool, particularly in Florida, which has become a red bastion, never more a swing state. In this sense, Richard Grenell's statements at CPAC 2025 about the current approach concerning regime change efforts did not sit well.

The economic impact of the measure

The economic fallout will be worst for Caracas. However, Gulf Coast refineries immediately saw prices of a medium sour crude they contract to increase; Brent crude oil futures also rose slightly early Thursday. Chevron exported an average of 300,000 bpd of Venezuelan oil to the United States this past month, when the country pumped one million bpd for the first time since 2019. During nearly all of 2024, through Chevron, Venezuela was the fourth-largest supplier of crude oil to the United States. The American company recovered more than half of the money owed to it by the South American nation. Nothing has been said about the licenses that the Treasury Department has also issued in favor of European companies such as Spain's Repsol and Italy's Eni to participate in Venezuela's oil production.

While I was interviewing @MariaCorinaYA , my father decided to break some YUGE news.

What a moment.

Still not tired of winning. pic.twitter.com/KdWLiyMgxp

— Donald Trump Jr. (@DonaldJTrumpJr) February 27, 2025

A consultant estimates that the Bolivarian government obtained between 2 and 3 billion dollars annually from the oil activities covered by all OFAC-granted licenses. I cannot find clarity in the data. To begin with, a $1 billion difference between the estimated extreme values seems too much to me. It is also stated that Venezuela profited from royalties and taxes. In Chevron's case, the license expressly prohibited these payments and the honoring of dividends in favor of PdVSA-linked entities. “Chevron conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by US government,” a company spokesperson said. According to this AP article, “Chevron sends money to joint ventures [...] majority-owned by PdVSA”, but the license only allowed production-linked transactions, including services. It will now be interesting to see how Caracas reacts beyond rhetoric, especially on the issue of deportation flights.

_Source

X Latam

Argentina approves live cattle exports as beef shipments soar https://t.co/zb5inLcKpn pic.twitter.com/bTO7KHszRV

— Reuters (@Reuters) February 26, 2025

Mexico gains 30 more days without tariffs 👇. “Trump says Canada, Mexico tariffs take effect on April 2”.

Dollar firms as Trump's shifting messages on tariffs stir uncertainty https://t.co/gusjwCmzcA pic.twitter.com/ZqeIfROxt9

— Reuters (@Reuters) February 27, 2025

Here they go 👇

Illegal aliens must register with the federal government. This has been the law of the land for decades & we will enforce it.

If they register and leave now, they may have the opportunity to return and live the American dream. If they don’t, they will face the consequences.… pic.twitter.com/mKFK9bYWlY

— Secretary Kristi Noem (@Sec_Noem) February 26, 2025

An interesting take by a Cuban-born, perfect female journalist on Rubio. It's related to Trump's erratic foreign policy on Russia, Venezuela, and Cuba. Will the former hawkish senator last long in Foggy Bottom?

Trump’s views on Russia put Rubio’s long-held opposition to authoritarian leaders to the test https://t.co/gjVcUWQ7kG

— Miami Herald (@MiamiHerald) February 27, 2025