W. Schreiner Parker, Managing Director for Latin America at Rystad Energy, has commented on the consequences of U.S. President Donald Trump’s decision to revoke Chevron’s license to operate in Venezuela. He stated that this action delivers a significant blow to the country’s already fragile oil sector.
“Chevron’s presence in Venezuela was crucial,” Parker noted. “As the last major US company operating there, it played a key role in sustaining oil production amidst years of mismanagement and sanctions.” He said that Chevron’s technical expertise, equipment, and access to diluent were critical for maintaining production levels.
With Chevron’s exit, Parker warned that Venezuela’s state-run Petróleos de Venezuela, S.A. (PDVSA) would face substantial operational challenges. “This will likely lead to a decline in crude output and further deterioration of oil infrastructure.”
The decision may also push Venezuela to deepen its energy ties with China, Russia, and Iran, Parker said. However, he stressed that these partnerships would likely fall short of replacing the lost US expertise and investment.
It could also see the return of ghost fleets, old vessels without proper insurance, undetermined ownership, and sailing under a convenience flag used by Iran, North Korea and Venezuela to counter Western sanctions.
While some Venezuelan officials may label the move as “economic warfare”, Parker believes the long-term consequences could be dire. “This could accelerate the collapse of Venezuela’s energy sector, further destabilizing both the economy and the government,” he posited.
