US President Donald Trump has announced the revocation of licences granted by the Biden administration that allowed US oil companies to operate in Venezuela despite crippling sanctions on the country, a move that particularly affects Chevron, the only major American oil company with significant operations there.

“We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022, and also having to do with Electoral conditions within Venezuela, which have not been met by the Maduro regime,” Trump wrote on his Truth Social account on February 26.

The US president said the permits would be terminated as of March 1, 2025, with "no option for renewal" – several months earlier than the end of July expiry date set under the Biden administration.

Trump cited two principal reasons for his decision: the Maduro regime’s failure to meet electoral conditions and its inadequate pace in accepting Venezuelan nationals deported from the US. "The Maduro government has not been transporting the violent criminals that they sent into our Country back to Venezuela at the rapid pace that they had agreed to," Trump said.

Venezuela’s Executive Vice President Delcy Rodríguez condemned the move, stating, “By announcing sanctions against the US company Chevron, intending to harm the Venezuelan people, they are actually inflicting damage on the United States, its population, and its companies.”

“These types of failed actions drove migration from 2017 to 2021, with the widely known consequences,” she added.

The decision represents a significant setback for Venezuela's economy. Chevron had helped revitalise the country's oil production, which exceeded one million barrels per day in February for the first time since June 2019, according to OPEC figures.

In partnership with state-owned Petróleos de Venezuela SA (PDVSA), Chevron reached production of more than 200,000 barrels per day by 2024, according to data from the US Congressional Research Service.

US crude imports from Venezuela averaged 222,000 barrels per day from January to November 2024, US Energy Information Administration data shows. Though representing a minimal portion of total US oil imports, these shipments accounted for approximately 10% of Chevron's worldwide liquids production last year.

Unlike government oil revenues, which often bypass the broader economy, Chevron’s dollar earnings remain within Venezuela. Much of it is reinvested in local currency through private banks, enabling lending to businesses that stimulate economic growth.

Joint ventures between Chevron and PDVSA are estimated to have contributed around $4bn in tax payments over the past two years, accounting for roughly a quarter of the government’s total revenue.

Some of this cash has trickled down to consumers, supporting a modest recovery visible in new retail chains, luxury stores, and car dealerships in Caracas.

Yet the vast majority of the population remains in poverty, while over 7.7mn Venezuelans have left the country over the past decade.

The economic boost has not led to political reforms, contrary to the expectations of former President Biden when he partially eased Trump-era sanctions for six months in October 2023 in a bid to coax the Chavista leader into holding free and fair elections.

This strategy bore no fruit, as the July 28 elections that saw Maduro winning a third term are widely regarded as fraudulent. Sanctions were swiftly reinstated, but a number of ad-hoc licences remained in place for international oil firms, with Chevron being the most important.

Despite sending mixed signals at times, Trump had previously voiced his intentions regarding Venezuela. On February 18, during a press conference at Mar-a-Lago, he questioned the exemption that allowed Chevron to operate despite sanctions. "Why did they do that? Why go to the enemy and give them billions and billions?" the president asked.

US Secretary of State Marco Rubio, a known hawk against Latin American leftist regimes, has long criticised the licence, considering it a key source of dollar funding for Maduro's government, which Washington and many Western countries do not recognise as the legitimate winner of the disputed July 2024 election.

The Trump administration had previously appeared willing to maintain the Chevron authorisation as long as the Maduro government cooperated on accepting deported Venezuelan nationals. In what many viewed as a sign of improved relations, Trump's envoy Richard Grenell travelled to Caracas last month to discuss migration cooperation, securing Venezuela's willingness to accept deportees from the US.

Neither the US Treasury Department nor Chevron have yet confirmed details of the new sanctions regime announced by Trump.