Venezuela Strikes Back

T

Timshel

New member
Nutball Chavez...

http://www.foxnews.com/story/0,2933,330252,00.html

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

...

"I speak to the U.S. empire, because that's the master: continue and you will see that we won't sent one drop of oil to the empire of the United States," Chavez said during his weekly radio and television program, "Hello, President."
 
This could get interesting. We are their largest client. It would crush their economy unless they find another buyer. It could hurt us short term while we find an alternate source, but essentially all that would happen is we would buy more from another supplier. Probably force someone else to buy from Venezuela in the process given the limited amount of supply.

I hope Chavez continues down this path. It will force us as a country to look even harder at ways to remove our dependence on foreign energy.
 
Superfreak said:
This could get interesting. We are their largest client. It would crush their economy unless they find another buyer. It could hurt us short term while we find an alternate source, but essentially all that would happen is we would buy more from another supplier. Probably force someone else to buy from Venezuela in the process given the limited amount of supply.

I hope Chavez continues down this path. It will force us as a country to look even harder at ways to remove our dependence on foreign energy.
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Be careful what you wish for.

Venezulela isn't the only oil-producing country looking to make a statement to the US. Chavez could ignite an embargo that could further cripple an already weak US economy.
 
Chavez does have some pull. a natural competitor in Ecuador seems to have aligned with him lately.

things are not totally undoable yet.. I would like to see the US form stronger bonds with Chavez's competition in South & Central America. Put some pressure on him.
 
blackascoal said:
Be careful what you wish for.

Venezulela isn't the only oil-producing country looking to make a statement to the US. Chavez could ignite an embargo that could further cripple an already weak US economy.
Click to expand...

Oil revenue is a huge portion of the Venezuelan economy Chavez needs to stay in power. It may jack up the price of oil in the short term but he has to sell his oil to someone, so does Iran... they cannot afford to not sell their oil.

So if overall supply remains the same, then at most it will simply increase the cost of shipping the oil. Would also likely increase the price a bit as people don't like instability like that would promote.
 
Chapdog said:
Chavez does have some pull. a natural competitor in Ecuador seems to have aligned with him lately.

things are not totally undoable yet.. I would like to see the US form stronger bonds with Chavez's competition in South & Central America. Put some pressure on him.
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The problem is that global supply is limited and demand continues to increase. Thus, even if we shift more to his competition, his oil will still be purchased. Unless of course he pulls it completely from the market.... but that would be economic suicide and I doubt he is that ignorant.

The only way to put pressure on Chavez is to drop the price of oil. The only way to do that is to decrease demand.
 
Superfreak said:
Oil revenue is a huge portion of the Venezuelan economy Chavez needs to stay in power. It may jack up the price of oil in the short term but he has to sell his oil to someone, so does Iran... they cannot afford to not sell their oil.

So if overall supply remains the same, then at most it will simply increase the cost of shipping the oil. Would also likely increase the price a bit as people don't like instability like that would promote.
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Are you sure the US is the only client in the world looking to buy Venezuelan oil?

This is from 2006 ...

Venezuela Cautions U.S. It May Curtail Oil Exports

By JUAN FORERO
Published: February 27, 2006
http://www.nytimes.com/2006/02/27/international/americas/27venez.html

BOGOTÁ, Colombia, Feb. 26 — Venezuela's oil minister, in blunt comments published in a Caracas newspaper on Sunday, warned the United States that it could steer oil exports away from the United States and toward other markets.

The minister, Rafael Ramírez, said Venezuela, which is the world's fifth-largest oil exporter and supplies more than 10 percent of American oil imports, could act in the face of what he described as aggression by the Bush administration.

Although such warnings have become part of President Hugo Chávez's verbal arsenal against the Bush administration, the comments by Mr. Ramírez, coupled with the increasing sale of oil to China, are seen by oil experts and political analysts as a signal that Venezuela is serious about finding new buyers.

"Physically it's very feasible, and politically it's very feasible," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation, a New York policy analysis group financed by the industry. "It comes with an economic penalty, but apparently Chávez is willing to pay that price."

That economic penalty comes in the increased costs to transport crude from oil-rich Latin America to as far away as China and India, two fast-growing, energy-hungry giants that are eager to buy Venezuelan oil. China is a 30-day tanker trip from Venezuela, while the United States is just 5 days away and is well-equipped to refine the heavy, highly sulfurous Venezuelan oil .

Mr. Chávez's government, which has increasingly been sparring with the Bush administration over everything from the Iraq war to the Venezuelan leader's close ties to Cuba, is moving swiftly to forge energy ties with China. Venezuela has said that this year it will double exports to China, to 300,000 barrels a day. Venezuela ships about 1.5 million barrels a day to the United States.

--more at link
 
blackascoal said:
Be careful what you wish for.

Venezulela isn't the only oil-producing country looking to make a statement to the US. Chavez could ignite an embargo that could further cripple an already weak US economy.
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LOL. Not selling it at all would be the only way, because of the fungibility of the product. So long as it is sold at all it frees up the commodity for the US to purchase.
 
BAC....

Again... worldwide demand will not change. There will be buyers for the oil. Most prefer to buy from someone as close to them as possible to reduce transportation expenses. However, if Chavez stops selling to the US, we will simply go to someone else to buy which will drive up the costs to the point that someone else goes to Chavez to buy his oil.

The only way he can effect the supply/demand equation is to pull his oil off the market completely.

It is like the morons that do the "don't buy gas on Saturdays" type campaigns to "hurt the oil companies". The consumers can only truly effect the oil companies bottom line if they reduce overall demand. Shifting the demand from one day to the next won't make a difference. They only have control over one side of the supply demand equation. Just as Chavez does.
 
Superfreak said:
BAC....

Again... worldwide demand will not change. There will be buyers for the oil. Most prefer to buy from someone as close to them as possible to reduce transportation expenses. However, if Chavez stops selling to the US, we will simply go to someone else to buy which will drive up the costs to the point that someone else goes to Chavez to buy his oil.

The only way he can effect the supply/demand equation is to pull his oil off the market completely.

It is like the morons that do the "don't buy gas on Saturdays" type campaigns to "hurt the oil companies". The consumers can only truly effect the oil companies bottom line if they reduce overall demand. Shifting the demand from one day to the next won't make a difference. They only have control over one side of the supply demand equation. Just as Chavez does.
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You make my point.

Venezuelan oil will get sold whether the US buys it or not. We will have to look further and increase our costs to make up for what isn't being shipped directly to the US.

OPEC is looking to convert to euros and there are otherb oil-producing nations that habve an axe to grind with the US.

Furthering tensions is not in the best interest of Americans.
 
If it wasn't for the high global demand of Oil in the past decade Chavez would have already bankrupt the country.
 
blackascoal said:
You make my point.

Venezuelan oil will get sold whether the US buys it or not. We will have to look further and increase our costs to make up for what isn't being shipped directly to the US.

OPEC is looking to convert to euros and there are otherb oil-producing nations that habve an axe to grind with the US.

Furthering tensions is not in the best interest of Americans.
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I think you are missing the point. All Chavez will accomplish is raising transportation costs for everyone.
 
Superfreak said:
I think you are missing the point. All Chavez will accomplish is raising transportation costs for everyone.
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That's my point.

Is that in the American best interest .. especially given all the other factors that could come into play .. especially given the state of our teetering economy?

America needs leadership that doesn't give the finger to the rest of the world .. at our peril.
 
blackascoal said:
That's my point.

Is that in the American best interest .. especially given all the other factors that could come into play .. especially given the state of our teetering economy?

America needs leadership that doesn't give the finger to the rest of the world .. at our peril.
Click to expand...

While I agree with your last sentence, I do not think that is the case here. Chavez is the one that decided to nationalize in the manner he did. He essentially seized assets and told the oil companies they could essentially shove the losses where the sun don't shine. It is Exxon, not the US government, that told Chavez to go to hell. It is Exxon, not the US government, that succeeded in getting the assets frozen until Chavez agrees to come to the table to discuss resolution. They obviously presented enough evidence to the British and Dutch courts to justify the assets being frozen.
 
THIS is comical shit.
He won't do it, if he did someone else surely buys his oil. And is there another MORON stupid enough to starve his country to spite us.
Blackasacomidic fool, our economy is most certainly not teetering. It's by far the strongest in the world. Did moveon.moron tell you to say that?
 
Superfreak said:
While I agree with your last sentence, I do not think that is the case here. Chavez is the one that decided to nationalize in the manner he did. He essentially seized assets and told the oil companies they could essentially shove the losses where the sun don't shine. It is Exxon, not the US government, that told Chavez to go to hell. It is Exxon, not the US government, that succeeded in getting the assets frozen until Chavez agrees to come to the table to discuss resolution. They obviously presented enough evidence to the British and Dutch courts to justify the assets being frozen.
Click to expand...

I agree with you here .. however, nationalizing oil assets and natural resources is taking place all over the world and it is in the best interests of those nations to do so. The perception is that US corporate interests and the US government is inseperatable .. which is not far from the truth.

We invaded Iraq for US corporate interests, but have yet to get the Iraq Oil Law we demanded to solidify our piracy.

The point is that we should step carefully with respect to the rest of the world. We are in no position to play cowboy.
 
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