President Donald Trump said on Jan. 20 that his administration would likely stop buying oil from Venezuela.
“It was a great country 20 years ago, and now it’s a mess,” Trump told reporters in the Oval Office, hours after his inauguration. “We don’t have to buy their oil. We have plenty of oil for ourselves.”
Expanded sanctions imposed by the first Trump administration in 2019 significantly restricted Venezuela’s oil industry. The Biden administration later eased some restrictions, maintaining company-specific licenses that allowed companies such as Chevron to operate under limited conditions in Venezuela.
In April 2024, the United States reimposed oil sanctions on Venezuela over election concerns.
Venezuelan President Nicolás Maduro was sworn in on Jan. 10 after a contentious election.
Opposition leader María Corina Machado called Maduro’s inauguration a “coup d'état” and a violation of the nation’s constitution.
The Chinese Communist Party has been a supporter of Maduro. In a July 2024 statement, Chinese leader Xi Jinping said, “China will, as always, firmly support Venezuela’s efforts to safeguard sovereignty, national dignity, and social stability.”
“The Biden administration has allowed oil to flow. [Maduro] stole the election, completely violated what Biden told him he would do,” he said.
He said that Venezuela “sadly, is not governed by government.”
‘New President’s Unpredictability’
Tamas Varga, an oil analyst at PVM Oil Associates, told the Epoch Times that OPEC, with its massive spare capacity, “could easily replace lost Venezuelan barrels.”OPEC consists of 12 member countries: Venezuela, Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, and the United Arab Emirates.
Varga said that sanctions on Venezuela must be viewed through the prism of the Biden administration’s sanction package on Russia’s shadow fleet, which impacts Venezuelan exports.
On Jan. 10 the U.S. Treasury imposed sanctions on 183 vessels that have shipped Russian oil, many of which are in the so-called shadow fleet of aging tankers operated by non-Western companies.
“If reversed, Venezuelan oil will keep flowing, most likely to China and Iran,” he said.
If the sanctions stay, he said, the impact on the global oil balance will be minimal. Varga said that whether U.S. oil and gas production grows or not will be more of the “function of market economics than Trump.”
He added that if the dollar remains strong during Trump’s presidency, it will make oil more expensive in other currencies and consequently lower demand.
“When we draw a line here, we conclude that the current snapshot is unfavorable for oil prices and at the same time acknowledge that given the new president’s unpredictability, the picture could change swiftly,” Varga said.
A spokeswoman for Chevron told The Epoch Times that Chevron “conducts its business in Venezuela in compliance with all applicable laws and regulations.”
“We have been a constructive presence in Venezuela for over a century, where we have dedicated investments and a large workforce,” she said. “We remain committed to the safety and wellbeing of our employees and their families, the integrity of our joint venture assets, and the company’s social and humanitarian programs that continue to positively impact the lives of Venezuelans.”
