The US government has notified foreign partners of Venezuela’s state oil company Petroleos de Venezuela SA (PDVSA) of the imminent cancelation of authorizations that allow them to export Venezuelan oil and byproducts, sources close to the decision by US President Donald Trump’s administration said on Saturday last week.
In recent years, former US president Joe Biden’s administration granted the authorizations to secure Venezuelan oil for refineries from Spain to India as exceptions to the US sanction regime on the South American country.
The companies that had received licenses and comfort letters from Washington include Spain’s Repsol SA, Italy’s Eni SpA, France’s Maurel & Prom Co, India’s Reliance Industries Ltd and US Global Oil Terminals LLC.
Photo: Reuters
Most companies had already suspended imports of Venezuelan oil following Trump’s imposition last week of secondary tariffs on buyers of Venezuelan oil and gas, according to sources and vessel tracking data.
The combination of tariffs and license cancelations to enforce sanctions is expected to squeeze Venezuela’s oil exports in the coming months, after they began to decline this month, data showed.
Last month, Venezuela exported 910,000 barrels per day of crude and fuel, more than January’s 867,000 barrels per day.
Similar measures by Trump’s first administration in 2020 knocked down Venezuela’s oil output and exports, creating the need for PDVSA to use intermediaries to allocate cargoes to China and leading to a pact with Iran. Those middlemen still do business with PDVSA.
Last month, Trump said a key license to US producer Chevron Corp to operate in Venezuela and export crude to the US would be canceled. Days later, the US Department of the Treasury ordered the company to wind down Venezuelan operations, and last week extended the deadline to May 27.
The withdrawal of the most important US license for Venezuela’s energy industry has sent a strong signal of Washington’s policy change toward Venezuela, as Trump’s administration also curbs migration, with a special focus on Venezuelans illegally in the US.
Following reports by international observers of irregularities in Venezuelan President Nicolas Maduro’s re-election last year, Trump has ramped up pressure on his government while accusing him of failing to make progress on electoral reforms and migrant returns.
It was not immediately clear if all PDVSA partners were given the same May 27 deadline to wind down operations. The terms of Chevron’s license termination also have not been completely clarified.
US Secretary of State Marco Rubio this month said that foreign oil companies in Venezuela would receive new guidance.
Maduro has criticized the sanctions, saying they amount to an “economic war.”
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