French oil company Maurel et Prom experienced a significant drop in share prices, plummeting 15% in early trading on Monday.
This sharp decline was triggered by an announcement from the company that its license to operate in Venezuela had been revoked by the United States, according to a Reuters report.
The revocation of this license represents a major setback for Maurel et Prom’s operations and financial outlook, as it effectively bars the company from continuing its activities in the Venezuelan oil sector.
This development highlights the risks and challenges faced by international oil companies operating in politically volatile regions, where changes in government policies and sanctions can have a profound impact on their business.
Additionally, Spain’s Foreign Minister Jose Manuel Albares stated that the government will defend Repsol’s interests after the Spanish oil company was notified that its Venezuelan oil licence had been revoked on Monday.
Tariff on Venezuelan oil buyers
Last week, US President Donald Trump announced that his administration will impose 25% tariffs on countries buying oil and gas from Venezuela, which had already shaken up the crude market.
Market participants remained concerned about the impact of the new sanctions, while refineries that rely heavily on Venezuelan crude may have to look at other options.
Meanwhile, the prospect of restricting supply could push crude oil prices higher, putting further pressure on economies around the world.
Furthermore, Eni, an Italian oil and gas company, confirmed on Sunday that it was notified by US authorities that it would no longer be permitted to receive crude oil from Venezuela’s PDVSA as payment for natural gas production in the country.
The Biden administration had permitted individual companies to source Venezuelan oil for refineries located in countries ranging from Spain to India.
These authorizations were exceptions to the US sanctions on Venezuela during the former US President’s term.
Indonesian M&P affected
In May 2024, M&P, which is majority-owned by the Indonesian government, was granted a license for its 40% consolidated interest in Petroregional del Lago, a Venezuelan firm that operates the Urdaneta Oeste field in Lake Maracaibo.
The US Treasury Department’s Office of Foreign Assets Control (OFAC) revoked the company’s license on March 28, according to a press release from the company.
The revocation includes a wind-down period until May 27.
It added:
M&P is currently assessing the implications of this decision in close consultation with its legal advisers.
On Monday, M&P shares fell 15% in Paris, Repsol dipped 1.5% in Madrid, and Italy’s Eni experienced a slight decline.
India’s Reliance Industries, which operates the world’s largest refining complex, will also stop importing Venezuelan oil.
This decision comes after the US imposed a 25% tariff on countries that purchase crude oil from Venezuela, according to media reports.
LSEG data revealed that the Indian conglomerate has been importing an average of 2 million barrels of Venezuelan crude oil per month. This follows the approval granted by US authorities last year.
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