President Donald Trump’s administration is gearing up to reinstate Chevron’s licence to operate in Venezuela, authorising the US oil major to resume crude production in its joint ventures alongside state-run Petróleos de Venezuela SA (PDVSA).

The Wall Street Journal broke the story, citing sources familiar with the matter. If confirmed, the decision would mark a reversal from February 2025, when Chevron’s operations were halted due to what Washington described as Venezuela’s failure to deliver on electoral reforms and migrant repatriation efforts.

The newly reissued licence reportedly allows Chevron to collect payments in barrels of oil rather than cash, skirting direct financial transactions with Nicolás Maduro’s government. 

This workaround appears designed to ensure that no revenue flows into the hands of Venezuela’s embattled socialist regime, according to people briefed on the arrangement. 

The move follows months of lobbying by Chevron, which faces nearly $3bn in outstanding debt tied to joint ventures in the country.

Chevron’s permit had initially been granted under the Biden administration in late 2022 as a mechanism to push for democratic elections. 

However, this strategy ultimately failed, as Maduro intensified repression against the opposition and the July 2024 election, though officially giving the incumbent a third term, has been widely regarded as fraudulent.

Following the disputed election, Trump, freshly inaugurated for a second term last January, opted to suspend the company's access to Venezuelan oilfields altogether. Temporary extensions were issued in April and May, setting the stage for this week's full reinstatement.

The policy pivot comes amid parallel negotiations between Washington and Caracas that led to the release of 10 American detainees and the repatriation of 250 Venezuelans held in El Salvador. 

While details remain scarce, Bloomberg reported that the agreement explicitly avoids any tax or royalty payments to Maduro’s regime, reflecting a broader effort to separate energy dealings from direct political support.

Market reaction was muted. Brent crude edged up just 0.1% to $68.57 per barrel in New York trading, amid concerns that renewed Venezuelan output could exacerbate global oversupply.

"The news about Chevron being able to go back into Venezuela and get oil going again just took the knees out of the market," said John Kilduff, partner at Again Capital LLC, as quoted by Reuters.

Kilduff added that analysts do not expect the Trump administration to clear the way for other US oil firms to resume operations in Venezuela, observing that "this is a unique one-off."

The move caps months of erratic US policy towards Venezuela, a country which hosts the world's largest proven oil reserves, as Washington has struggled to balance energy interests with diplomatic pressure on Nicolás Maduro's regime.

Venezuelan crude production has held steady at 900,000-1mn barrels per day since US companies curtailed operations in June, according to OPEC data. To circumvent sanctions, Caracas has reportedly increasingly routed shipments through Malaysian transhipment hubs before final delivery to China, defying Trump's threats in April to slap 25% secondary tariffs on countries importing Venezuelan oil.

Chevron, in a statement, underscored its "compliance with laws and regulations applicable to its business, as well as the sanctions frameworks provided for by the US government, including in Venezuela." The licence would allow the Houston-based company to restart shuttered operations and bring US dollars into an economy battered by years of mismanagement and sanctions.