U.S. Authorities Revoke Oil Licenses of Repsol and Other Companies

Repsol, S.A. REPYY, along with other oil majors like France’s Maurel et Prom (M&P) and Italy’s Eni, recently received a notification from the U.S. authorities regarding their revocation of oil licenses for operations in Venezuela. This sudden decision has disrupted the global energy landscape, forcing firms to reassess their strategies. The move, announced by the U.S. Treasury’s Office of Foreign Assets Control, follows an executive order imposing a 25% tariff on any country purchasing Venezuelan oil or gas. The companies have been notified that a May 27 deadline has been set to wind down their operations in the Southern American country.

Effect on Venezuela

This development by the United States raises questions about the future of Venezuelan oil exports, which have provided a crucial lifeline for the nation’s struggling economy. With global energy markets already facing uncertainty, the revocation of these licenses could further tighten oil supply chains, especially in Europe and Asia.

The strictness of the U.S. policy aims to deepen Venezuela's isolation, targeting its government amid ongoing political and economic turmoil. Venezuela has always opposed the sanctions, citing them as illegitimate measures that lead to economic war. In response, the Venezuelan oil minister invited affected companies to explore alternative partnerships in a “win-win” contract model that could allow these firms to continue operations under new terms.

Spain’s Support to Repsol

The revocation development by the United States has given a serious blow to Repsol, but Spain’s foreign minister has confirmed that the government is committed to providing all the necessary support to defend the company’s interests. The company, along with the government, is currently in active conversation with the U.S. authorities to find ways to continue operating in Venezuela. The Spanish government is in regular contact with Repsol’s CEO to develop an understanding of the effect of the license revocation decision and if they have any room to resolve the issue via mutual understanding.

The government’s assurances regarding Repsol’s security highlight the importance of energy companies to the Spanish government. With substantial investments in Latin America, Spain faces potential economic risks from negative fallout.

The Global Effect

The U.S. decision marks a sharp reversal from previous sanctions exceptions granted under former President Joe Biden’s administration. European refineries, particularly in Spain and Italy, may need to secure alternative crude sources, while Venezuela’s allies such as China and Russia could step in to fill the gap.

REPYY’s Zacks Rank and Key Picks

Repsol SA explores, develops and produces crude oil products and natural gas, transports petroleum products and liquefied petroleum gas, and refines petroleum. Currently, REPYY has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some top-ranked stocks like Expand Energy Corporation EXE, ARC Resources Ltd. AETUF and Canadian Natural Resources Limited CNQ. While Expand Energy and ARC Resources currently sport a Zacks Rank #1 (Strong Buy) each, Canadian Natural carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

U.S.-based Expand Energy is a leading natural gas producer formed through the merger of Chesapeake Energy Corporation and Southwestern Energy Company. The Zacks Consensus Estimate for EXE’s 2025 earnings indicates 422.70% year-over-year growth.

Calgary-based ARC Resources is engaged in the exploration, acquisition and development of oil and natural gas properties in western Canada. The Zacks Consensus Estimate for AETUF’s 2025 earnings indicates 86.13% year-over-year growth.

Calgary-based Canadian Natural Resources is one of the largest independent energy companies in Canada, engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2025 earnings indicates 5.53% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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