On Wednesday, the Wall Street Journal reported that the Biden administration might scale down its sanctions on Venezuela’s authoritarian regime under President Nicolás Maduro. The report indicated that the easing of restrictions will benefit energy giant Chevron (NYSE:CVX) as it can resume drilling Venezuelan crude. However, it also included a statement by the White House National Security Council Spokesperson Adrienne Watson, indicating that the U.S. government has no such intentions “without constructive steps” by Maduro to regain democracy in the country.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Following the WSJ report, a Reuters report reaffirmed the Biden administration’s stance on Venezuela sanctions. In the report, Watson stated, “Our sanctions policy on Venezuela remains unchanged. We will continue to implement and enforce our Venezuela sanctions.”
At the same time, the `WSJ reported that the U.S. Treasury Department’s Office of Foreign Assets Control is gearing up to issue one or more licenses to Chevron, which will allow the company to operate its four existing oil joint-ventures with the state-run oil company, Petróleos de Venezuela SA (PdVSA).
For several years, Venezuela has been under U.S. sanctions for multiple reasons, including terrorism and drug trafficking, sanctions issued by former President Barack Obama’s administration due to antidemocratic, human rights violations, and corruption, and additional oil-related and financial sanctions imposed by the Trump government.
Given the ongoing supply constraints due to the Russia-Ukraine war and OPEC+ production cuts, any relief on the sanctions front would have benefited Venezuela and oil companies, like Chevron, which have exposure to Venezuelan operations.
What is the Target Price for Chevron Stock?
Chevron stock has rallied this year amid soaring oil prices triggered by the Russia-Ukraine conflict. Shares have risen 35% year-to-date.
The Street currently has a Moderate Buy rating for CVX stock based on 10 Buys, four Holds, and one Sell. At $176.33, the average Chevron stock price target implies 11.2% upside potential from current levels.
