Trump’s new policy relieves some pressure on Chevron to quickly exit Venezuela after the US Treasury Department on March 4 gave it 30 days to wind down operations. Trump had issued the initial wind-down after he accused President Nicolas Maduro of not making progress on electoral reforms and migrant returns.
The US treasury said on Monday it would wait seven more weeks until May 27 before terminating a license that the United States has granted to Chevron since 2022 to operate in sanctioned Venezuela and export its oil to the United States.
Chevron’s extension came hours after Trump announced the new tariff, saying Venezuela has sent “tens of thousands” of people to the United States who have a “very violent nature.”
The two moves temporarily focus Trump’s pressure on buyers of Venezuelan crude oil other than the United States, such as China, though it is uncertain how his administration will enforce the tariff.
Oil is Venezuela’s main export and China, which is already the subject of US tariffs, is the largest buyer. In February, China received directly and indirectly some 503,000 barrels per day of Venezuelan crude and fuel, some 55 percent of total exports.
India, Spain, Italy and Cuba are other consumers of Venezuelan oil.
Tariffs imposed by China on imports of certain types of Venezuelan oil in past years led to a decline in the volume of Venezuelan crude received by Chinese buyers, which ultimately forced state company PDVSA to widen price discounts to its most important market.
David Goldwyn, president of consultancy Goldwyn Global Strategies, said the new tariffs could have the ironic effect of increasing global demand for Russian oil.
“China and India are unlikely to risk additional tariffs to access Venezuelan heavy oil, when they can buy Russian crude,” he said. (Reuters)
