Oil Companies, Biden Policies, and Democracy in Venezuela

The Wall Street Journal reported on September 6^th that “Chevron plays an outsize role in Venezuela’s sanctions-hit economy. The company’s business in Venezuela generates about 20% of national crude exports and 31% of the government’s total oil income….”

On July 28, the candidate of the democratic opposition, Edmundo Gonzalez, won the presidential election in a 2-to-1 landslide. Nicolas Maduro’s regime refuses to acknowledge defeat and has responded with a new wave of brutality and arrests. There is even an arrest warrant for Gonzalez, who is now in hiding. The United States and other Latin and European democracies, along with key NGOs, have clearly stated that Gonzalez won and have denounced Maduro’s reaction.

But what was Chevron’s reaction? More lobbying. The Journal reports “meetings with White House and State Department officials days after the election.” Chevron officials, it continues, “said its presence in Venezuela bolsters global oil supplies and U.S. energy security” and “serves U.S. interests.”

This is nonsense. The global oil market is about 105 million barrels a day, and whether Venezuela produces perhaps 300,000-400,000 barrels more with Chevron’s help than without it does not meaningfully affect supplies or prices. Once upon a time—for example, during the Second World War— the United States needed Venezuelan oil badly. Today the Unites States is an oil exporter and is doing just fine without Venezuelan oil.

During the Trump administration I served as Special Representative for Venezuela in the State Department. Chevron lobbied us then, too; indeed its CEO met with us three times in 2019 and 2020, if I recall correctly. Chevron made the same arguments—and we dismissed them as unpersuasive. Producing more in Venezuela under the Maduro regime may have been in Chevron’s interests, but not those of the United States.

That remains true today. Venezuelan economic recovery and an avoidance of millions more refugees from Venezuela depend on a peaceful, negotiated transition back to democracy. Venezuelans need some hope that things will get better at home or millions more will leave, joining the roughly eight million who have left already. The economy will never recover under the corrupt, incompetent Maduro mismanagement.

The Journal reports about the Chevron lobbying that “Chevron was careful not to advocate specific policies, according to a person familiar with the talks. But its message—that its oil production should continue in Venezuela—has carried weight with the administration, say people familiar with the matter.”

There is nothing wrong at all with Chevron’s lobbying. It has the right to lobby and of course to ask for actions that will benefit its shareholders. The problem is with the Biden administration officials with whom that lobbying “carried weight.” So far, their reaction to the egregious election theft by Maduro and his new reign of terror has been strong words—and no actions.

The proper reaction should be full reimposition of sanctions on Venezuela, including those affecting Chevron and the European oil companies that have also benefitted from the Biden softening of sanctions. Those activities are benefitting and financing the Maduro regime even now as it cracks down again on Venezuelans, and that should not be permitted. The United States should be pursuing a policy that increases the pressure on the Maduro regime, not one that allows oil companies to help it keep afloat.