CARACAS, July 12 — A new US executive order has placed Venezuela’s oil sector back under the regulatory microscope, targeting an industry that still accounts for 95 percent of the country’s export revenues. The order, issued this week, grants the Secretary of State authority to issue licenses to US oil companies seeking to operate in Venezuela — a technical shift that could reshape the flow of heavy crude into American refineries. The detail that matters is the numbers.
US imports of Venezuelan crude have already fallen sharply: approximately 200,000 barrels per day in 2024, down from 800,000 barrels per day in 2018. That decline reflects years of sanctions, expropriation, and the collapse of Venezuela’s state-run oil infrastructure.
The new order does not automatically reverse that trend, but it opens a door. Under the hood, the mechanism is licensing. The Secretary of State now has the authority to issue permits to US oil companies.
Chevron is the obvious candidate. The company held a license to operate in Venezuela under a 2022 OFAC license that expired in 2024.
In 2023, Chevron’s Venezuelan operations produced about 200,000 barrels per day — roughly the same volume the US imported from the entire country last year. The global oil market is watching. According to the International Energy Agency, a 1 million barrel per day increase in Venezuelan output could reduce global prices by $5 to $10 per barrel.
That is a significant swing for an industry that remains sensitive to supply shocks. The technical reality is that Venezuela’s production capacity has been gutted by years of underinvestment and mismanagement; any increase would take time and capital. ### The bondholder angle The executive order also touches a financial nerve. Venezuelan sovereign debt trades at around 20 cents on the dollar, a reflection of the market’s assessment that repayment is unlikely under current conditions.
US bondholders holding that debt have been waiting years for a resolution. The new licensing framework could, in theory, allow some economic activity that generates revenue streams — but the order does not guarantee any payout to creditors.
The US Chamber of Commerce estimates that US companies have lost over $10 billion in assets and contracts in Venezuela since 2017 due to expropriation and sanctions. That figure is a reminder that the relationship between Washington and Caracas has been costly for American business, not just for the Venezuelan state. ### What to watch The order gives the Secretary of State discretion, not obligation. As ever, the technical detail that matters is whether the administration chooses to issue licenses and to whom.
Chevron’s expired 2022 license was a test case; the new framework could see a broader set of companies apply, but the political calculus in Washington remains cautious. For now, the Venezuelan oil sector remains a shadow of its former self.
The new executive order does not fix the infrastructure, the debt, or the political standoff. It does, however, create a legal pathway — and in a sector where 95 percent of export revenue is at stake, that is not nothing.
Sources
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