Venezuelan President Hugo Chavez threatened to stop exporting oil to the U.S. if the British government freezes assets in a bid to stop him from stealing ExxonMobil’s (XOM) Venezuelan operations. He says this move would send oil prices above $300 a barrel.
(The latter claim is ludicrous: Total Venezuelan production is only 2.6 million barrels a day, only 3% of world production, and exports are only 2.2 million. But a complete cut-off certainly would drive prices higher…)
Chavez is backing Venezuelan state oil company PDVSA in its dispute with ExxonMobil (XOM). Exxon succeeded in convincing a British court to freeze $12 billion of the PDVSA’s assets after the Venezuelan government took over Exxon’s multi-billion dollar operation in the country. Reuters:
“If they freeze us there will be no more oil for the United States, and the price will go to $300,” Chavez says during a televised meeting with Caribbean and Central American leaders.
But Chavez also insisted that the current spike is being driven by a “speculative bubble,” which, if popped, would send prices back down to $70. This, however, contrasted sharply with a statement Chavez made only Saturday, in which he suggested that tensions in Iran would send prices up to $200:
“Years ago I said oil was going to go to $100 per barrel, now it looks like it is headed toward $200.”
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