How Chevron’s Exit From Venezuela By May 27th, 2025 Threatens US Energy Independence And Hands China A Strategic Victory

The decision to not renew Chevron's oil license in Venezuela is going to give China and the CCP a massive hold over Latin America and the largest oil reserves in the world at the expense of US Energy.

On May 27, 2025, Chevron, the last major American oil company operating in Venezuela, will be forced to wind down its operations in the South American nation, marking a significant blow to U.S. energy interests and a dangerous step backward for American energy independence. This deadline, set by the U.S. Treasury Department under President Donald Trump’s administration, stems from the revocation of Chevron’s OFAC-issued license to operate, move tied to escalating sanctions against Venezuela’s Maduro regime. While the intent behind these sanctions was to punish what many view as a corrupt and anti-democratic government, it is clear the ultimate consequences of this license revocation could undermine America’s strategic position in the global energy market, cede critical influence and power to China, and weaken our nation’s ability to secure affordable, reliable energy for the American people and initiate another migrant crisis at our borders. Rather than America First, this policy shift signals a China First approach that should be avoided at all costs.

For over a century, Chevron has been a cornerstone of American energy presence in Venezuela, a country sitting atop the world’s largest proven oil reserves—some 300 billion barrels. Chevron’s joint ventures with Venezuela’s state-owned PDVSA produce approximately 242,000 barrels per day, accounting for roughly a quarter of Venezuela’s total oil output. In 2024 alone, Venezuelan crude made up 13% of imports to U.S. Gulf Coast refineries, providing a vital supply of heavy crude to American refiners like Valero Energy, PBF Energy, Phillips 66, and ExxonMobil which is simply unavailable in large, commercially viable quantities from US domestic oil producers.

This steady flow of oil has helped stabilize domestic fuel prices and ensured that American consumers aren’t left at the mercy of volatile global markets. But, with Chevron’s forced exit, this critical supply chain is at risk, threatening higher energy costs for American families and businesses at a time when economic stability is paramount and at a time where a global economic showdown between the US and China is festering.

The decision to push Chevron out of Venezuela is rooted in the Trump administration’s aggressive stance against Nicolas Maduro’s regime, which has been accused of electoral fraud, human rights abuses, and U.S. demands on the repatriation of illegal aliens.

On March 4, 2025, the Trump administration replaced Chevron’s General License 41 with a wind-down order, extended to May 27th via General License 41B, signaling a return to the “maximum pressure” sanctions of Trump’s first term – arguably one of the few foreign policy failures of the first Trump administration. Additionally, a 25% tariff on countries purchasing Venezuelan oil, effective April 2nd, aims to choke off Maduro’s revenue streams. While these measures may hurt Maduro’s coffers, they are much more likely to simply drive Venezuela’s oil trade underground, reducing transparency and empowering adversaries like China to fill the void left by American companies.

Why would we want to give China the upper hand and allow them to control Venezuela’s oil reserves when we can use these reserves to our benefit and negotiate a deal with Venezuela that allows for illegal alien repatriation and US control over Venezuelan oil with strict stipulations that President Trump and his special envoy Ric Grenell can implement and control?

Grenell’s recent visit to Venezuela proved that Maduro, despite his flaws, has a deep respect for President Trump and is willing to comply with illegal alien repatriation and hostage releases. Moreover, he has demonstrated a preference for doing business with American controlled companies over Chinese, CCP controlled companies. Why would we want to further stoke conflict with Venezuela when we can take control of their oil reserves to benefit our long term goal of energy independence?

China, already the largest buyer of Venezuelan oil, stands to gain the most from Chevron’s departure. In February 2025, China imported 503,000 barrels per day—55% of Venezuela’s total exports—often at steep discounts due to sanctions. With Chevron out, Venezuela’s Vice President Delcy Rodríguez has actively courted Chinese investment, and even met with Chinese officials in April to secure increased oil purchases and supplies of diluent needed to process Venezuela’s tar-like crude.

This move not only strengthens China’s grip on Venezuela’s vast oil reserves, but also enhances Beijing’s influence in America’s backyard, just across the newly proclaimed Gulf of America. As Chevron CEO Mike Wirth recently warned, if American companies are forced out, “the oil production continues, and American companies are replaced” by Chinese and Russian drillers who offer less favorable terms to Maduro but secure strategic footholds in the Western Hemisphere.

Allowing China and Russia to have an increased presence and economic control in the Western Hemisphere poses a national security threat, and it contradicts President Trump and the State Department’s recent move to take back the Panama Canal for the explicit purpose of countering Chinese influence in Central and South America and the Panama Canal Zone.

The implications for American energy independence are dire. The United States, the world’s largest oil producer, has championed energy dominance under Trump’s “America First” agenda. Yet, losing access to Venezuelan crude—a reliable, geographically proximate source that compliments, rather than competes with domestic production—could increase U.S. reliance on more distant suppliers like Saudi Arabia or Iraq, raising procurement costs and exposing American refiners to geopolitical risks due to the perpetual state of chaos and violence in the Middle East.

U.S. Energy Secretary Chris Wright has downplayed the impact of China gaining more control over oil exports in Venezuela, claiming “small interruptions from other nations” won’t affect global supply. However, analysts at TD Cowen have recently warned that Chevron’s exit from Venezuela could spike crude prices, hitting U.S. Gulf Coast refineries hard and potentially driving up gasoline and diesel costs for American consumers. At a time where inflation remains a current concern, as the US continues its efforts to recover from Biden’s economy, this is a self-inflicted wound we cannot afford. Additionally, why should America forgo the tens of thousands of well-paying jobs that will be created by allowing American companies to do business with Venezuela? These are American jobs in oil-field services, refining, and trading that will instead be sacrificed, once again, to China if the licenses to Americans in the oil industry are not extended in Venezuela.

Moreover, Chevron’s departure risks undermining the transparency and efficiency it brought to Venezuela’s oil sector. The “Chevron model,” which paired joint ventures with PDVSA with strict oversight to curb corruption, boosted Venezuelan production by 70,000 barrels per day in 2023 alone. Without Chevron’s expertise and capital, Venezuela’s crumbling energy infrastructure could deteriorate further, reducing output and forcing Maduro to rely on opaque deals with Chinese firms controlled by the CCP, or shadow fleets, as seen during earlier sanction periods. These shadow oil fleets operate with a high degree of non-transparency and evade sanctions and regulations. These ships, often older and flagged in countries outside of Western sanctions, are used to circumvent price caps and other restrictions imposed on Russian oil exports.

This will not only enrich corrupt intermediaries, but it also diminishes U.S. leverage over Venezuela’s oil market, handing China a free pass to dictate the terms.

From an America First perspective, maintaining a strong U.S. presence in Venezuela’s oil sector is not about coddling Maduro, but about securing our national interests. Chevron’s operations have kept American companies at the forefront, ensuring that the United States—not China or Russia—benefits from Venezuela’s vast resources. By forcing Chevron out, we risk ceding this strategic asset to adversaries who will use it to fuel their own economic and geopolitical ambitions.

As the looming May 27th deadline approaches, the United States must reconsider this path. An extension of Chevron’s, and other American’s licenses will allow for the Trump administration to have a pragmatic approach with strategic engagement, ensuring that American companies, not Chinese companies, shape the future of Venezuela’s oil industry.

The stakes are high. Losing ground in Venezuela not only threatens our energy security but also emboldens China to challenge U.S. leadership in the Western Hemisphere. For the sake of American workers, consumers, national security, and our global standing, we must prioritize energy independence and keep Chevron and other American oil companies in the game to block China from turning Venezuela into their personal oil depot.

President Trump’s energy strategy is about dominance—drill, baby, drill, and keep our adversaries at bay. Letting Chevron leave Venezuela is a step backward, and we can’t afford to lose ground to Communist China.