Article

2008-02-11 Caribbean-Latin America

CARACAS, Venezuela President Hugo Chavez on Sunday threatened to cut off oil sales to the United States if Exxon Mobil Corp. wins court judgments to seize billions of dollars in Venezuelan assets.

"If you end up freezing (Venezuelan assets) and it harms us, we're going to harm you," Chavez said. "Do you know how? We aren't going to send oil to the United States. Take note, Mr. Bush, Mr. Danger."

Although Venezuela still is a significant oil supplier to the U.S. its relative importance has been decreasing during the last 5 years, going from second to fourth place among U.S. import sources. This is due to the loss of production capacity of the Venezuelan oil industry, a decline brought about by the politicization of the state-owned petroleum company under Chavez. Not only has production capacity declined but also half of the Venezuelan oil exports to the U.S. can only be refined in the United States due to its physical properties. This means that Chavez cannot easily sell this oil to alternative clients such as China or India. For this to be possible these countries would have to build refineries capable of processing Venezuelan oil, something that would take at least three to four years to accomplish, even if they started today.

emphasis mine

Posted by Mercutio 2008-02-11 00:00|| || Front Page|| [11131 views ] Top

#1 No comment can improve on the headline...

Posted by M. Murcek">M. Murcek 2008-02-11 00:31|| 2008-02-11 00:31|| Front Page Top

#2 I'm sad that the catastrophe of socialism seems to be repeated over and over again. The forward auction in stolen goods that is democracy always fails at this point.

Posted by Bright Pebbles 2008-02-11 06:29|| 2008-02-11 06:29|| Front Page Top

#3 Yugo, Hugo!

Posted by Spot">Spot 2008-02-11 08:05|| 2008-02-11 08:05|| Front Page Top

#4 Darwinate, buddy. Darwinate. The sooner the better.

Posted by Darrell 2008-02-11 09:26|| 2008-02-11 09:26|| Front Page Top

#5 Didn't someone here a while back highlight that fact that Mercutio did? That half of his (raw/crude) oil had to be refined HERE? It seems that (at that time), China was looking to build refineries that could handle Chavez's 'heavy crude' too...anyone know the status on those Chinese refineries?

It's a self-fulfilling prophecy for Chavez....we (via Exxon-Mobil) seize his assets (taking $ from him). He then quits exporting crude to us, taking even MORE $ from him. Unless he has an immediate "secondary market" (e.g. China/India), he's not gonna be able to dump that much crude w/o lowering prices (somewhat) worldwide. And, even if Exxon-Mobil loses in court, note that Venezuela's output has already lost capacity at home and abroad...we could very well see Chavez implode if that happens. Also, we could just "seize" his (CITGOs) assets here and tell him, "Unless you step down, we will shut down these refineries to the point where you won't sell crude at all for 3-4 years." He KNOWS he can't p!ss us off too much too.

Posted by BA 2008-02-11 09:45|| 2008-02-11 09:45|| Front Page Top

#6 BA, exactly. You've summarized it perfectly.

Posted by Woozle Elmeter 2907 2008-02-11 09:54|| 2008-02-11 09:54|| Front Page Top

#7 I believe you're right about the refining issue, BA, it seemed familiar to me when I skimmed off the article.

As far as seizing CITGO, IMHO, that would take stones that I don't see in evidence in this administration, certainly not in a 2009 Dem admin and frankly unlikely in a 2009 GOP admin. If there is any such action it would most likely come about as a result of the Exxon suit and would be tied up so long in court that China could build a dozen refineries.

Posted by Mercutio 2008-02-11 11:34|| 2008-02-11 11:34|| Front Page Top

#8 Mercutio, I can't tell you how glad I am you're posting under your old nym again. (Although I must admit some of Fred's anonymizer nyms are really, really tempting!)

Posted by trailing wife ">trailing wife 2008-02-11 12:49|| 2008-02-11 12:49|| Front Page Top

#9 OOgo Chavez OOgo Chavez OOgo Chavez...

I can't stop this feelin'

Posted by OldSpook 2008-02-11 13:09|| 2008-02-11 13:09|| Front Page Top

#10 TW__Way too tempting for me to be consistent......

M.

Posted by Omolurt Borgia5731 2008-02-11 13:27|| 2008-02-11 13:27|| Front Page Top

#11 Then please sign off your posts with Mercutio? It makes me feel senile to know I'm not recognizing old friends.

Posted by trailing wife ">trailing wife 2008-02-11 13:45|| 2008-02-11 13:45|| Front Page Top

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