The showdown also underscored the stewing tensions between the United States and China, a pair of international powers, countries whose fortunes are becoming increasingly intertwined despite their vast cultural, economic and governmental differences.

Chevron finally prevailed with a big helping hand from U.S. lawmakers, whose apprehensions about a U.S. oil company falling into the hands of a company controlled by China's Communist government prompted Hong Kong-based CNOOC to withdraw its all-cash bid of $18.4 billion.

But it could turn into a Pyrrhic victory for Chevron - and perhaps even the United States - if China decides to use its increasing financial clout to retaliate for the political bashing of CNOOC.

''China is probably already thinking, 'We don't know how and we don't know when, but we will get [Chevron] for this,' '' said Oppenheimer & Co. analyst Fadel Gheit. ''This will go down in the history books in China.''

For now, CNOOC's retreat clears the way for Chevron Corp. to complete its acquisition of Unocal next week, even though its cash-and-stock offer is currently worth $700 million less.

Chevron had several factors working in its favor - regulatory clearance, the support of Unocal's board and the political uproar over CNOOC's bid.

CNOOC raised hackles in Congress because the company is part of the China National Offshore Oil Corp., which is 70 percent owned by China's government. That connection raised concerns about whether a CNOOC takeover would threaten the United States' economic and national security interests.

In a strongly worded statement, Hong Kong-based CNOOC said it might have raised its bid even higher, if not for the politics.

''The unprecedented political opposition . . . was regrettable and unjustified,'' CNOOC said. ''This political environment has made it very difficult for us to accurately assess our chance of success, creating a level of uncertainty that presents an unacceptable risk to our ability to secure this transaction.''

Chevron initially agreed to buy Unocal in early April for $62 per share. Unocal - prized for its oil and natural gas supplies in Asia and the Gulf of Mexico - also had been negotiating with CNOOC and another unidentified bidder believed to be Italy-based Eni SpA.

After Chevron had received all the required regulatory approvals to buy Unocal, CNOOC tried to break up the marriage six weeks ago with an all-cash offer of $67 per share.

CNOOC's move triggered a political furor that reflected the U.S. concerns about China's long-term ambitions in the world economy, along with its increasing consumption for oil - a thirst that has helped drive up prices during the past two years. Many lawmakers also fretted Unocal's oil drilling might have military applications that could some day be used against the United States.

Most industry experts doubted those concerns were well founded, but University of Maryland business professor Peter Morici said Congress raised legitimate issues. ''I don't know why we should give our oil technology or any other kind of technology to an authoritarian country like China,'' he said.