Chevron Corporation (CVX Quick QuoteCVX - Free Report) is expected to be granted a limited license from the U.S. Treasury Department for limited operations in Venezuela. This special waiver may authorize the oil giant to conduct only critical maintenance and safety-related functions within the sanctions-bound South American country. The license comes as Chevron and other firms in America face looming deadlines to wind down their operations in the region.

Shift in U.S. Policy on Venezuelan Oil Engagement

The decision to restrict Chevron’s operations is a marked departure from the broader authorization previously extended under President Biden. That waiver, issued in late 2022, allowed Chevron to not only maintain operations but also produce and sell Venezuela’s crude oil, a move designed to re-engage the Nicolás Maduro regime in democratic negotiations. However, this policy was revoked in February by President Trump, citing the failure of Venezuela to commit to democratic reforms and condemning what he referred to as concessions to a dictatorship.

The new license, in contrast, is highly restrictive, signaling a return to Trump-era policies that favor isolation and pressure over engagement. The scope of the waiver is expected to resemble Chevron’s earlier license that expired in November 2022, strictly prohibiting new investments or crude exports while allowing minimal upkeep to ensure the safety of existing infrastructure.

Strategic Timing as License Expiration Approaches

Last week, Secretary of State Marco Rubio confirmed that the current license for Chevron is set to expire on May 27 and the U.S. government will not renew it in the current form. The decision undercuts previous expectations of a 60-day extension, which had been hinted at by Ric Grenell, President Trump’s special envoy, following his diplomatic visit to Caracas.

The sudden policy shift has cast uncertainty over Chevron’s long-term presence in Venezuela, an OPEC nation with the world’s largest proven oil reserves. While the exact terms of the new waiver remain undisclosed, sources indicate that only essential operations critical for safety and environmental protection will be permitted. This limits Chevron’s activity to basic maintenance, such as preventing spills or leaks and preserving the integrity of facilities.

Potential Implications for U.S.-Venezuela Relations

The limited license could serve as a strategic compromise, offering a middle ground that allows the United States to maintain some influence in Venezuela without appearing to support the Maduro regime. This restrained approach may also leave open the possibility for future diplomatic negotiations, though the Trump administration has clearly emphasized a harder line.

Importantly, there is no indication yet that other U.S. companies operating in Venezuela will receive similar permissions. For now, the focus remains solely on Chevron, highlighting its unique role as the last remaining major oil producer from America in the country.

Broader Political Context and Recent Developments

This policy development coincides with heightened diplomatic activity. On Friday, senator Marco Rubio met with five opposition aides from Venezuela who escaped persecution from the Maduro regime after seeking refuge in Argentina’s embassy in Caracas. Rubio reaffirmed U.S. support for the restoration of democratic governance in Venezuela, reinforcing the administration’s message that political change remains a top priority.

In his public statements, Rubio emphasized the release of political prisoners and reiterated America’s unwavering stance against authoritarianism in Latin America. These steps are consistent with the Trump administration’s larger campaign to intensify pressure on Nicolás Maduro and disrupt the financial networks supporting his regime.

Chevron’s Long-Term Strategy and Operational Footprint

Houston, TX-based integrated oil and gas company’s continued presence in Venezuela, even in a limited capacity, reflects the strategic value of its joint ventures with state-run oil company PDVSA, including operations in key fields such as Petroboscan and Petropiar. Though these ventures have been largely dormant due to U.S. sanctions, Chevron has maintained a skeleton crew and infrastructure on the ground to preserve its stakes in anticipation of eventual re-engagement.

However, with this latest move, Chevron may now face an extended period of non-operational status, hampered by strict limitations that prevent it from generating revenues or advancing production capabilities. The license is expected to include rigorous compliance and reporting requirements, designed to ensure that no indirect support reaches the Maduro regime.

Conclusion: A Calculated Yet Restrictive Measure

The expected Chevron license reflects a calibrated shift in U.S. policy toward Venezuela, balancing pressure with a narrow path for future diplomacy. This restricts Chevron's operational flexibility, but also keeps it from going out completely, which would give way to rivals from China, Iran and Russia, all of whom are strengthening their energy connections with Caracas. This restricted authorization reasserts American leverage while holding Chevron in strategic limbo, poised between compliance and opportunity in one of the world’s most geopolitically complex oil markets.

CVX's Zacks Rank & Key Picks

Currently, CVX holds a Zacks Rank #5 (Strong Sell).

Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 (SUBCY Quick QuoteSUBCY - Free Report) , which sports a Zacks Rank #1 (Strong Buy), Paramount Resources Ltd. (PRMRF Quick QuotePRMRF - Free Report) and  RPC, Inc. (RES Quick QuoteRES - Free Report) , each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.