19 Mar Delcy’s Tales: Strategic Analysis of Chevron’s Exit from Venezuela and the Revocation of Concessions by the U.S.

By,

William Acosta, SME, MSI2

Jesús Daniel Romero, Senior Fellow, MSI2

The recent departure of Chevron from Venezuela, along with the revocation of oil concessions by the Biden administration, marks a significant shift in Latin America’s energy landscape. This article examines the strategic implications of this decision, not only for Venezuela but also for U.S. and Chinese geopolitical influence in the region, as well as the risks of instability and violence that could emerge in the country.

Furthermore, in this context of energy and geopolitical tension, recent statements by Venezuelan Vice President Delcy Rodríguez have further escalated the conflict. Rodríguez accused ExxonMobil of orchestrating a destabilization plan against Venezuela, linking the economic sanctions imposed on the country to a broader strategy of structural weakening.

Chevron’s Role in Venezuelan Oil Exports

Before its license was revoked, Chevron played a crucial role in Venezuela’s oil production and exports. With a production of over 200,000 barrels per day, the company primarily shipped this heavy crude to U.S. refiners. This oil flow not only benefited Chevron but also allowed Venezuela’s state-owned oil company, Petróleos de Venezuela (PDVSA), to free up additional volumes that could be exported to other markets, particularly China (Reuters, 2023).

Delcy Rodríguez and the Accusation Against ExxonMobil

In a recent press conference, Vice President Delcy Rodríguez denounced ExxonMobil as part of an alleged plot to weaken Venezuela through economic sanctions and market manipulation. Her argument is based on a document titled “Sanctions on Venezuela’s Oil: Less Money Means Less Power,” which analyzes the impact of U.S. economic restrictions on the country.

Rodríguez highlighted the involvement of Juan Zarate, a key architect of global sanctions, and Peter Williams of ExxonMobil, as actors in a strategy aimed at restricting Venezuela’s access to international energy markets. According to the Venezuelan government, this is part of a broader offensive that combines economic pressure with a political destabilization campaign (Financial Times, 2023).

The Indirect Benefit for China

Chevron’s departure creates a vacuum that China is highly interested in filling. Historically, China has imported large volumes of Venezuelan crude, often using opaque methods to circumvent U.S. sanctions. By reducing pressure on PDVSA, Chevron’s exports to the U.S. facilitated the diversion of more Venezuelan crude to China through informal or barter agreements (Bloomberg, 2024).

Impact Following Chevron’s Departure

With Chevron’s license revocation, Venezuela is forced to redirect its crude exports. China emerges as the primary destination, but this shift comes with significant challenges. China tends to demand deep discounts due to sanctions and the high refining costs of Venezuelan crude, which could result in lower revenues for PDVSA despite an increase in export volumes (S&P Global, 2024).

Economic Consequences for Latin America

• Greater dependence of Venezuela on China: With fewer U.S. buyers, the country will be forced to accept lower prices and potentially trade oil for Chinese goods and infrastructure, increasing its debt with Beijing (BBC News, 2023).

• Reduction of U.S. investments in the region: Colombia, Brazil, and other oil producers could see decreased U.S. investment in their energy markets (The Economist, 2024).

• Impact on Mexico: Pemex could face increased pressure to fill the supply gap left by Venezuela in crude shipments to the U.S.

A Dark Horizon: A Return to Bad Habits

The revocation of Chevron’s concessions by the administration of Donald J. Trump marked a turning point in U.S.-Venezuela relations, with significant repercussions for the economy, geopolitics, and regional security. The reduction of international oil companies in Venezuela will not only impact PDVSA’s revenues but could also deepen the country’s dependence on actors like China, Russia, and Iran, who have capitalized on the void left by Western sanctions (Foreign Policy, 2023).

Historically, during periods of greater economic isolation, the Venezuelan regime has turned to alternative financing sources, including illicit activities such as drug trafficking. The lack of legitimate income and international pressure could incentivize an increase in drug trafficking and other illicit businesses, strengthening criminal networks within and beyond the country. This would pose a risk not only for Venezuela but also for regional and U.S. security, given the Maduro government’s historical ties to organized crime groups and narco-terrorist organizations (Insight Crime, 2024).

In this context, Washington’s decision to take a tougher stance could create a double-edged effect: on the one hand, it increases pressure on the Maduro regime; on the other, it could push Venezuela toward an even more opaque economy, increasingly reliant on external actors with strategic interests in the region. The key question is how Maduro’s government will react to this new scenario—whether the crisis will open new opportunities for negotiation or, on the contrary, deepen isolation and instability.

Final Conclusions

Chevron’s departure from Venezuela and the country’s growing dependence on China are reshaping the energy and geopolitical map of Latin America. Meanwhile, the tensions between Venezuela and ExxonMobil add a new dimension to the crisis, with implications for the territorial dispute with Guyana and the country’s political stability.

The future of Venezuela in the energy market will depend on its ability to navigate pressures from Washington, China’s increasing influence, and internal struggles within Chavismo.

References

• BBC News. (2023). China’s role in Latin America’s energy sector.

• Bloomberg. (2024). Chevron’s exit from Venezuela: Economic and geopolitical impacts.

• Council on Foreign Relations. (2023). China’s geopolitical strategy in Latin America.

• Financial Times. (2023). How China circumvents U.S. sanctions on Venezuela.

• Foreign Policy. (2023). Internal power struggles within Chavismo.

• Human Rights Watch. (2024). Venezuela: Economic collapse and humanitarian crisis.

• Insight Crime. (2024). Organized crime and petroleum smuggling in Venezuela.

• Reuters. (2023). Chevron’s role in Venezuelan oil production.

• S&P Global. (2024). China’s expanding oil imports from Venezuela.

• The Economist. (2024). U.S. investment shifts in Latin America’s energy markets.

• United Nations. (2024). Latin America’s migration crisis.