Chevron Gets Short 30 Days Notice to End Venezuela Operations

Chevron Corporation CVX has received a 30-day notice from the Trump administration to stop pumping and selling Venezuelan oil and wrap up its operations in the country. The deadline, set for April 3, provides the company only 30 days instead of the normal six-month wind-down period.Since 2022, Chevron has been allowed to operate in Venezuela as an exception to U.S. sanctions, exporting crude to the United States and recovering billions in pending debt. However, with the new directive, the company must halt its operations.A similar wind-down order was provided by Trump’s administration in 2020, which allowed Chevron to continue production in Venezuela but banned its exports or imports to the United States.Impact on U.S. and Venezuelan Oil MarketsChevron’s presence in Venezuela has been a key stabilizer for both countries’ oil sectors. The company’s joint ventures with state firm PDVSA account for nearly 20% of Venezuela’s oil output, which has significantly bolstered the country’s economy, controlled its sky-high inflation and injected hard currency into its private sector.Chevron, currently carrying Zacks Rank #3 (Hold), has also been a source of heavy crude to major oil refining companies in the United States, such as Valero Energy Corporation VLO, Exxon Mobil Corporation XOM, PBF Energy Inc. PBF and many more.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The license termination will not only reduce Venezuela’s oil revenues but may also pressure U.S. gasoline prices and increase the risks for U.S. companies to invest overseas.February data showed a decline in Chevron’s Venezuelan oil exports from 294,000 barrels per day (bpd) in January to 252,000 bpd. This downward trend could accelerate, affecting crude supply chains globally.Venezuela's Economic and Political FalloutMaduro’s administration has strongly opposed the sanctions, citing them as illegitimate measures that lead to economic war. Since 2023, Chevron’s operations in Venezuela have provided the country with a steady source of revenues in terms of royalties and tax payments, lifting Venezuela’s economy, especially its oil and banking sectors.The loss of Chevron’s payments in royalties and taxes may weaken the country's exchange market, leading to currency depreciation and further economic instability.Although the magnitude of the scale-down was not immediately clear, the company said that it is aware of Trump's directive and would abide by any direction given by Treasury to implement it.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Valero Energy Corporation (VLO): Free Stock Analysis Report PBF Energy Inc. (PBF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks