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Update(1355ET): On Saturday the White House unveiled a monumental shift in its Venezuela policy, given only a short time ago Washington didn’t even officially recognize Nicolás Maduro as the socialist Latin American country’s legitimate ruler, announcing the easing of oil sanctions which allows Chevron to pump Venezuelan crude and export it to the United States.

Chevron was forced to halt all drilling there just under three years ago due to Trump administration sanctions, also amid a US policy that recognized opposition leader Juan Guaidó as “interim president”. 

Bloomberg confirms following the fresh White House statement, “Chevron received a six-month license that authorizes the company to produce petroleum or petroleum products in Venezuela, according to a general license from the US Treasury Department. The San Ramon, California-based driller is also allowed to resume exports of crude oil that had been been halted since 2019, when the US ratcheted up sanctions against the OPEC producer.”

OIL MARKET: Washington eases its oil sanctions on Venezuela, allowing Chevron (for the next 6 months) to pump crude in the Latin American nation and export it into the United States. A major shift in the White House policy | #OOTT #Venezuela $CVX 🇻🇪 ⛽️ 🇺🇸 pic.twitter.com/fM1F6lOtJ2

— Javier Blas (@JavierBlas) November 26, 2022

It was in April 2020 that Chevron was ordered by then President Trump to “wind down” its oil fields in Venezuela, which also meant withdrawing or decommissioning its extensive machinery and infrastructure there.

For this reason Chevron’s CEO Mike Wirth recently estimated it would take “months and years in order to begin to maintain and refurbish fields and equipment and change any investment activity.” For this reason many are seeing the White House’s conditional six month license as a completely unrealistic timetable and constraint.

Deal is a joke
1. Need billions and a lot more time than 6 mos to squeeze more oil out of that country due to neglected infrustructure
2. VZ govt will get no proceeds under deal. Maduro will not be pleased. US is hoping for “free and fair elections” for this acc. to NY Times.

— Tracy (𝒞𝒽𝒾 ) (@chigrl) November 26, 2022

Chevron as the last major US oil company to operate there had before the oil embargo invested in Venezuela’s oil fields and machinery over the last century to the tune of an estimated $2.6 billion.

* * *

As Dave DeCamp of AntiWar.com previewed earlier, the US might soon grant Chevron a license to pump oil in Venezuela in a move that would ease crippling sanctions that were imposed on the South American country by the Trump administration.

According to The Wall Street Journal, the easing of sanctions is contingent on the implementation of a $3 billion humanitarian project that is expected to be announced by President Nicolas Maduro and his opposition this weekend. The project would be paid for with Venezuelan funds that have been seized by the US.

The license Chevron would be granted would still be limited as it would allow the oil company to regain partial control of its oil production in Venezuela, but it won’t be able to build new facilities until debts are repaid.

The Trump administration began imposing harsh sanctions on Venezuela in 2017 and really ramped them up in 2019 when the US recognized opposition figure Juan Guaido as “interim president” and backed a failed coup attempt against Maduro.

The US continued to increase sanctions on Venezuela following the failed coup and the country is essentially under an economic embargo.

The Journal report said that the license for Chevron would put the company under a framework of sanctions similar to the ones that went into effect in 2019.

This paragraph is remarkable. This Chevron license will yield no income for Venezuela, yet it’s supposed to be a “plum” for the Maduro govt? Plus notice the headline “Chevron to boost Vzla’s output” like the corporate overlords will be doing Venezuela a favor! pic.twitter.com/qrBWcarv9x

— venezuelanalysis.com (@venanalysis) November 24, 2022

US sanctions on Venezuela have had a devastating impact on the civilian population, but the Biden administration’s steps to ease sanctions are likely an effort to keep global oil prices down.

The move comes as the US and its allies are planning to implement a price cap on Russian oil that could backfire and cause Russia to significantly cut production.

Apple’s top manufacturing partner, Foxconn Technology Group, is set to see November iPhone shipments from a massive factory in Zhengzhou, China, known as iPhone City, plunge after a week of unrest, Reuters said, citing a source with direct knowledge of the matter. 

They said iPhone production would be slashed by more than 30% at Foxconn’s Zhengzhou plant in November versus an earlier estimate of up to 30% when problems at the factory began in late October. 

Most of the 200,000-person workforce has been living in isolation since last month. New hires were brought in recently as management wanted to keep churning premium iPhone models, including the iPhone 14 and 14 Pro. 

But Foxconn failed to live up to its promises of higher pay for new hires, which sparked a riot across the world’s largest iPhone factory earlier this week. To squash the violence, Foxconn began distributing 10,000 yuan ($1,400) to newly recruited workers to leave by Thursday.

“The source said more than 20,000 workers, mostly new hires not yet working on production lines, took the money and left,” Reuters said. 

The Zhengzhou plant accounts for 70% of global iPhone shipments, and a reduction in production will ripple through the supply chain. Foxconn, formally known as Hon Hai Precision Industry Co, is Apple’s top supplier, which means any manufacturing disruption in China could leave AT&T, Best Buy, and Verizon stores without iPhones.  

Another source said it’s “impossible” for Apple to resume full iPhone production by the end of the month. 

ODDO BHF, a Franco-German financial services group, said even if Apple shifts production to other plants, “the impact will probably be significant, as long as these protests are continuing in Zhengzhou, with significant delays to be expected for the iPhone 14.” 

Foxconn acknowledged it made errors in managing new hires while blaming local officials for unpredictable health policies that impacted meal delivery and made maintenance nearly impossible, according to Bloomberg, citing a person familiar with the company.  

“You see cases like Foxconn, and every company is now asking themselves, ‘Will that happen to me?’

“Any company that depends on manufacturing has to consider alternatives. It will be costly, but it will be less costly than only relying on China and then China doesn’t open up,” Alicia Garcia Herrero, chief Asia Pacific economist at Natixis, said. 

In early November, Foxconn revised its earning expectations down for Q4 on zero Covid disruptions at the assembly facility, while Apple warned iPhone capacity would be reduced. After chaos this week, more downward revisions could be ahead.