Chevron's risky bet could pay off

Chevron has long been criticized—on both business strategy and humanitarian grounds—for being the only major oil company to continue doing business in Venezuela long after peers like ExxonMobil and ConocoPhillips fled in the early 2000s.

But in an ironic twist of fate, that same risky investment might be paying off big-time just as President Trump turns up the volume on geopolitical tensions.

The US implemented a “total and complete blockade” on all sanctioned tankers linked to Venezuelan oil exports last week, and US authorities have so far seized two tankers, including one on Saturday. Today, oil prices jumped as the Trump administration escalated its feud with Venezuela by reportedly preparing to seize a third tanker, with crude climbing 2.58%.

This is all part of Trump’s larger effort to put pressure on Venezuelan leader Nicolás Maduro, and potentially even oust him, according to Bloomberg. While the US Coast Guard has carried out the tanker seizures, the US Navy has built up its presence near Venezuela, as the US purportedly looks to curtail drug smuggling in the region.

“Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America,” Trump wrote on Truth Social last week.

Chevron barrels on

While most tankers are idling at Venezuelan ports, Chevron—which produces roughly 200,000 barrels per day in the country—is as busy as ever.

Chevron has long had a unique deal in the region that makes it a frenemy of both Washington and Venezuela. The company has a special license from the US Treasury that allows it to do business in the nation without sanctions via a joint venture with Venezuela’s national oil company, PDVSA, which takes roughly half the oil Chevron produces. But to keep the US happy, Chevron is not supposed to pay taxes or give revenue directly to the Venezuelan government.

It’s a delicate balance with plenty of upside: Venezuela is home to some of the largest crude oil fields in the world, and Chevron is the only major global oil company with access to them. But Chevron’s operation is not without risk. For one, being in the center of this conflict could endanger its employees. Not to mention that its tenuous relationship with both the Trump administration and Venezuela’s government could go south at any moment.

Still, Chevron is most likely in a win-win situation. If Trump does topple Maduro’s government, Chevron will be a leader in resuscitating the country’s oil business. But if the two nations agree on a truce, then Maduro will want Chevron to help the government generate cash by upping its crude production and exports.—LB