Trump Says He is Terminating Venezuela Oil Imports

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With sanctions looming over imports of heavy crude oil, U.S. President Donald Trump took to social media to say a permit on deliveries from Venezuela was suspended.

"We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolas Maduro, of Venezuela, on the oil transaction agreement," Trump said late Wednesday on his Truth Social media platform.

U.S. President Joe Biden in 2022 authorized permits for Venezuelan exports through a venture between Chevron Corporation (NYSE:CVX) (Houston, Texas) and state-owned Petroleos de Venezuela (PDVSA) after Venezuelan President Nicolas Maduro vowed to work with the opposition on democratic elections.

Elections last year, however, were not seen as fair as electoral evidence pointed to a loss for Maduro at the polls. The permit was set for renewal on Saturday.

Trump said that his decision was a response to the post-election claims to the presidency by Maduro, adding Caracas was not accepting deportations of "violent criminals" of Venezuelan origin at a fast enough pace.

It's not clear if policy can be determined outside of official White House channels. There was no mention of the permit from the U.S. Treasury Department's Office of Foreign Assets Control, which would normally decide on any extensions.

Hours after his inauguration for a second, non-consecutive term in office in early January, Trump told White House reporters he was reconsidering imports from Venezuela.

"We don't have to buy their oil," he said. "We have plenty of oil for ourselves."

The U.S. is the world leader in crude oil production. The federal government estimated total U.S. crude oil production at 13.2 million barrels per day (BBL/d) last year, and it could move closer to 14 million BBL/d by 2026. That compares to an average of around 9 million BBL/d from Saudi Arabia.

Much of the U.S. refinery sector, however, is tooled to run heavier crude oil grades rather than the light, sweet crude oil found in shale. Of the 10.6 million BBL/d in imports over the four-week period ending February 21, more than 90% of the imports were of heavy crude oil.

Venezuelan crude oil imports averaged 229,000 BBL/d over the four-week period. Bill Turenne, a spokesperson for Chevron, told Newsweek the company was considering the implications of Trump's post.

"Chevron conducts its business in Venezuela in compliance with all laws and regulations, including the sanctions framework provided by the U.S. government," he said.

Trump's statement comes just days before he's expected to slap tariffs on his North American trading partners, which represent the top two crude oil exporters to the U.S. Rich in heavy crude oil, Canada alone accounts for 60%, or around 4 million BBL/d, of total U.S. crude oil imports.

Both the Canadian and Mexican governments are mulling their response. Mexican President Claudia Sheinbaum said she hoped existing trade deals would be respected, while Canadian Prime Minister Justin Trudeau said there was unanimous opposition from the government.

"The prime minister stated that he remains hopeful that tariffs will not be imposed, but he reiterated that Canada stands ready to respond if needed," Trudeau's office said Wednesday.

Ontario Premier Doug Ford is among those calling for a tit-for-tat response to tariffs. Trump is proposing a 10% tariff on imported Canadian energy and another 25% on goods sent from Canada and Mexico starting in March.

"These barrels would not be lost but most probably re-directed to other refining centers of the world whilst the U.S. would be forced to ensure alternative and more expensive supply," Tamas Varga, an analyst at London oil broker PVM, said in a Thursday newsletter.

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