Chevron's Venezuela Deal Sparks 1953 Iran Coup Comparison

Bloomberg economist Chris Kennedy compared Chevron's Venezuela oil deal to the 1953 US-backed coup against Iran, warning that the arrangement could rekindle nationalist and anti-American sentiment.

The $7 billion expansion in Venezuela's Orinoco Belt has sent Chevron's stock price soaring, but Kennedy noted that the deal is not just about production. It involves a Pentagon equity stake in a private company granted a 100-year lease to develop nearly 17 strategic oil fields.

The U.S. also receives the right to purchase 20% of the joint venture's production at cost, below market price. Chevron CEO Mike Wirth has called it the largest financial commitment from a major oil company since Nicolás Maduro's ouster.

Kennedy's warning is based on history: in 1953, the US-backed coup against Iran restored the Shah and reversed Mosaddegh's nationalization of Anglo-Iranian Oil Company. For 25 years, the arrangement looked like a geopolitical bargain, but the Islamic Revolution swept out the Shah in 1979.

The lesson is that oil concessions tied to unpopular regimes tend to expire when the regime does, not when the lease says they do. Kennedy noted that Venezuela currently averages 1.1 million barrels per day, well below its peak of 3.5 million barrels from nearly three decades ago.