U.S. Oil Shares Soar After Court Decision Against Maduro
The Trump administration authorized Chevron to reactivate its operations in Venezuela as part of an agreement.
Quick overview
- Oil-related assets saw significant gains on Wall Street following the capture of Venezuelan President Nicolás Maduro and Chevron's authorization to resume operations in Venezuela.
- Major U.S. oil producers like ExxonMobil, Chevron, and ConocoPhillips experienced notable stock increases, with Chevron rising by 5.1%.
- The Trump administration's agreement to allow Chevron to restart operations included the release of U.S. detainees and assurances that profits would not benefit Maduro's government.
- Brent crude prices saw a slight increase of 0.1% to $68.57 per barrel as markets reacted to the potential rise in global oil supply.
Oil-related assets led gains on Wall Street following the capture of Venezuelan President Nicolás Maduro and the authorization for Chevron to resume operations in the Caribbean nation.
Shares of major U.S. oil producers and energy services companies surged on Monday on Wall Street, reacting to the new scenario created by the trial in New York against Venezuelan President Nicolás Maduro, as well as statements by Donald Trump regarding Venezuela’s oil industry.
As a result, shares of oil majors such as ExxonMobil (+2.2%), Chevron (+5.1%), and ConocoPhillips (+2.6%) posted solid gains. Oilfield services companies also rallied sharply, with Halliburton rising 7.9% and Schlumberger jumping 9.1%. Refining and transportation firms joined the rally, including Marathon Petroleum (+5.9%) and Valero Energy (+9.2%).
U.S. authorizes Chevron to restart oil operations in Venezuela
The Trump administration authorized Chevron to reactivate its operations in Venezuela as part of an agreement that included the release of detainees and assurances that the proceeds would not flow to the Maduro government, according to El Espectador.
The administration reinstated Chevron Corp.’s license to resume oil operations in Venezuela after months of suspension. A source familiar with the matter told Bloomberg, speaking on condition of anonymity, that the move is part of a broader agreement between Washington and Caracas.
The deal included the release of 10 U.S. citizens detained in Venezuela and the repatriation of 250 Venezuelans imprisoned in El Salvador. According to Bloomberg, the agreement ensures that revenues from production rights and taxes will not directly benefit Nicolás Maduro’s government.
Markets reacted moderately to the news. Brent crude prices edged up just 0.1% to $68.57 per barrel, as investors weighed the prospect of a potential increase in global oil supply.
Houston-based Chevron had been the only major U.S. oil company maintaining a presence in Venezuela. Through joint ventures with state-owned PDVSA, its production had reached 240,000 barrels per day before operations were suspended in May, accounting for nearly 25% of the country’s total output.
Chevron conducts its global operations in compliance with applicable laws and regulations governing its business, as well as with the sanctions frameworks established by the U.S. government, including those in place for Venezuela.
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