Chevron's Venezuela Deal Compared to 1953 US-Backed Coup Against Iran

A $7 billion expansion deal between Chevron and Venezuela has sent the company's stock to a 52-week high, but one economist is warning that this arrangement may have far-reaching consequences.

Bloomberg Economics' Chris Kennedy compared the deal to the 1953 US-backed coup against Iran, which reversed the nationalization of Anglo-Iranian Oil Company and gave Western majors decades of favorable Iranian crude. The current arrangement 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 and said the development is expected to double Chevron's operations in the country.

Kennedy argued that this structure 'could rekindle nationalist and anti-American sentiment' and that a democratic transition in Caracas is 'a matter of when, not if.' A 100-year lease is a long time to bet against this pattern.