According to comments on DOC, this issue is now starting to be resolved, and credit card applications that were previously denied for this reason are being approved again.
According to DOC, Chase recently denied some credit card applications from certain states and regions. Based on available data points, it appears the location was determined via IP address. The states currently affected are: Texas, Oregon, Arizona & California. The denial letters also mentioned economic sanctions, though it is unclear what exactly is going on. So far, it appears these denials have involved business credit cards; we have not yet seen similar reports involving personal credit cards.
My personal suggestion is that if you are in one of these states and need to apply for a Chase business credit card, you may want to hold off for now and see how things develop. Of course, you could also try using a VPN service to switch your IP to another state before applying.
Some readers pointed out that this may be related to the traditional energy industry. For reference: