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Iran, Venezuela discuss oil embargo
Toward Freedom, VT ^ | August 17, 2005

Posted on 8/17/2005, 6:17:30 PM by Cincinatus' Wife

TEHRAN — "Oil is the lifeline of the West, and most of the West's military industries are dependent on it,” the Tehran Times suggested in an editorial last week. Irritated by a recent resolution by the International Atomic Energy Agency (IAEA) that called for a halt to Iran’s uranium conversion program, the newspaper suggested that oil-rich states form a united front and use oil as a tool to confront "western neocolonialist countries."

In Venezuela, Pres. Hugo Chavez has taken the idea a step further, threatening to halt oil exports if alleged attacks on his country continue, according to Agence France Press. Appearing last week as a witness at a symbolic “anti-imperialist court” in Caracas, Chavez said, “Washington’s molestation may cause more serious problems; our two oil tankers going to the U.S. everyday may go to another country.” He added that the “Northern America market is not compulsory for us.” Venezuela exports 1.5 million barrels of oil to the United States daily.

According to the Islamic Republic News Agency, the Iranian newspaper’s editorial described oil as “the most potent economic weapon for settling scores,” and suggested an embargo on oil sales to the United States and European countries that are pressuring Iran to end its nuclear program. It also criticized what it sees as a double standard, noting that Israel, Pakistan and India have nuclear weapons, and that most of them have conducted tests.

In an interview with an Israeli TV station from his Texas ranch, Pres. Bush expressed doubts that the European Union’s diplomatic initiative to defuse the crisis over Iran’s nuclear activities would succeed, and refused to rule out the use of force. "All options are on the table," he said.

Israel has been prodding Washington to get tougher, charging that Iran resumed its nuclear activities because it sensed the "weakness" of the international community. "Iran made this decision because they are getting the impression that the United States and the Europeans are spineless," a senior official from Israeli Prime Minister Ariel Sharon's office told Agence France Press.

The IAEA’s resolution expressed "serious concern" at Iran's resumption of uranium conversion and set a Sept. 3 deadline for its report on the country’s compliance. “We want diplomacy to work,” Bush commented, “and, you know, we will see if we are successful or not. As you know, I'm skeptical."


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; Front Page News; Government; News/Current Events; Politics/Elections; War on Terror
KEYWORDS: chavez; economicsecurity; energy; iran; nationalsecurity; oil; venezuela
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Hugo Chavez - Venezuela

***.......But Chávez's ambitions extend beyond the Americas. He has signed treaties for "technological cooperation" with the dictators of Libya, Iran, and Syria. He has numerous business interests in those countries, and has publicly described the terror-sponsors who rule them as his "partners" and "friends." The feeling is mutual. Iran and Libya have hundreds of millions invested in Venezuela. Significantly, Chávez was the only foreign leader to visit Saddam Hussein after the first Gulf war. During his visit he embraced Saddam and called him "brother."

..........And, as it happened, on the same day Hebraica was raided, Chávez was on a state visit to Iran. Just that morning, the Tehran Times had quoted his praise of President Khatami and the Iranian theocracy. Analysts in Venezuela suspect the true purpose of the raid originated in Chávez's eagerness to display solidarity with the Iranian mullahs. Chávez had traveled to Iran by way of Tripoli, where he described himself as "bathed in honor" after receiving the fantastically named Muammar Qaddafi Prize for Human Rights. In his acceptance speech Chávez was unequivocal: The "time is right to unite and face the imperialist challenge. Like Yasser Arafat, I now have only the revolutionary's gun since the olive branch has fallen."

Days afterward, Chávez accused Washington of unleashing "real terrorism" in Iraq and called for a "jihad" on American imperialism. Appearing on Al Jazeera, he described President Bush's foreign policy as vigilante violence: "It is not a war on terrorism, it is terrorism itself." From Iran, Chávez traveled to China, where he announced that China would replace the United States as the principal beneficiary of Venezuelan oil. By the end of his trip, Chávez had signed agreements with President Hu Jintao granting the China National Petroleum Corporation control of 15 Venezuelan oil fields, thereby securing for China a billion barrels of Venezuelan crude. Shortly after, Chávez declared himself a Marxist-Leninist in a speech in Calcutta. He then signed petroleum agreements with the Indian government while again indicating his desire to cut off Venezuelan oil exports to the United States.

In addition to his ideological alliances, petro-politics, and support for guerrilla terror throughout Latin America, Chávez has begun expanding Venezuela's military capability. In the past year he has more than tripled the Venezuelan military budget, purchasing 20 high-performance MiG fighter jets and 100,000 AK-47 machine gun rifles from the Russian government as well as an unprecedented number of helicopter gunships, surface-to-air missiles, and Onyx missiles (which can sink aircraft carriers). This spring, Chávez defended Iran's nuclear development program after warmly receiving their president in Venezuela and signing new "technological" treaties. In March he announced the creation of a two-million man reserve army to defend the revolution "against the American invasion."....*** Hurricane Hugo

1 posted on 8/17/2005, 6:17:37 PM by Cincinatus' Wife
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To: Cincinatus' Wife

Remember what caused Imperial Japan to enter WWII?

It would be unwise for Venezuala and Iran to attempt to cut off free access to oil.


3 posted on 8/17/2005, 6:22:49 PM by msf92497 (My brain is "twitchy")
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To: Cincinatus' Wife

Come on, oil speculators! This article alone should help you to push the price up to $80 a barrel! And push natural gas up, for good measure!


4 posted on 8/17/2005, 6:23:08 PM by mysterio
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To: Cincinatus' Wife

Iran Venezuela China ..... connect the dots


5 posted on 8/17/2005, 6:23:50 PM by dennisw (Mohammed was a successful Hitler. Hitler killed too many people too fast - L. Auster)
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To: bobbdobbs

http://www.miami.com/mld/miamiherald/news/12369099.htm

VENEZUELA AND CHINA


In ideology, oil, 2 nations find common ground

The ideological journeys of China and Venezuela seem to have brought the two together at a time when one needs energy re- sources and the other wants energy partners.

BY STEVEN DUDLEY

sdudley@herald.com


CARACAS - These days, it seems as if China and Venezuela are moving toward the same point but from opposite ends of a vast ocean.

China is the socialist state that has a thriving industrial sector and is embracing elements of capitalism; Venezuela is the capitalist country with massive oil reserves that is starting to talk more and more of socialism.

Their ideological journeys seem to have brought the two together at a time when one is in need of energy resources and the other is looking for new energy partners. And the results of this emerging relationship could influence the global balance of power for decades to come.

The partnership has already begun with promises to build energy infrastructure in China and develop social projects in Venezuela. The Venezuelan government has said it would like to double economic traffic between the two nations and hit $3 billion by next year.

Fittingly, the deal is being consummated with a journey over the sea. In May, the first tanker with 1.8 million barrels of crude left Venezuela for China -- part of a Caracas pledge to supply 30,000 barrels per day to China's starving market.

DIVERSIFICATION

Critics say this Venezuelan effort to diversify its roster of clients makes for short-term folly because its natural customer is the much-closer United States, while supporters argue it makes long-term sense because China's market promises a much bigger appetite in the years to come.

In the end, it may be a bit of both.

Chinese trade to Latin America has boomed in recent years. Even if, as a recent Goldman Sachs report indicated, it hasn't been wholly positive for the region -- especially for local textile markets in Mexico and Central America -- it has opened up new possibilities, in particular for countries with vast natural resources like Venezuela.

Venezuelan President Hugo Chávez has made no secret of his intentions to increase oil exports to China, a country he lauds as he pulls his country toward socialism. Chávez visited China in January and signed several letters of intent to exchange capital and open up the Venezuelan oil market for Chinese exploration and production projects, as well as develop natural gas fields and upgrade petrochemical plants.

Chávez -- a self-described socialist who has begun to create state-run industrial projects and appropriate private lands -- has also openly stated that he is seeking to break Venezuela's dependence on U.S. purchases.

Venezuela sends the United States 60 percent of the estimated 2.6 million barrels per day it produces. China represents the new frontier for his country's most important product -- oil is half of Venezuela's GDP.

''We have been producing and exporting oil for more than 100 years, but they have been years of dependence on the United States,'' Chávez said in January.

''Now we are free and we make our resources available to the great country of China,'' he added, making no effort to hide his admiration for the Beijing model.

On the surface, it makes little economic sense for Venezuela to begin shifting crude exports toward Asia. Demand for crude remains steady in the U.S. market, which oil tankers can reach in just five days. There is a large refining network, including that of Venezuelan state-oil company PDVSA's downstream arm, Citgo, in the United States, which can handle the heavy crude that accounts for much of Venezuelan exports.

China, on the other hand, is 45 days away. Some analysts estimate that in transportation alone, Venezuela would be losing between $5 and $10 per barrel compared to shipments to the United States.

''It doesn't make any sense,'' said Alberto Bernal, an analyst with the Singapore-based IDEAglobal. ``But it doesn't seem to matter to him because [Chávez] is crazy. He has a utopic way of looking at things.''

`GEOPOLITICAL WEAPON'

Chávez does often see economic policies through a political lens. He has even called oil ''a geopolitical weapon.'' He is providing Cuba and many other Caribbean nations with heavily subsidized oil to win allies, and is seeking to increase oil ties to natural competitors like Brazil and Argentina.

The government has also expressed interest in selling pieces of Citgo, claiming the company is subsidizing the Bush administration. And while demand for crude in China is rising tremendously, China currently does not have the refining technology to deal with Venezuelan heavy crude.

Analysts believe it would be Venezuela and not China, who would take the loss on this deal.

''It seems very clear that they are willing to relinquish some of the economic value,'' said Alberto Ramos, a senior analyst on Latin America for Goldman Sachs, referring to the Venezuelans. ``It follows more of a political rationality, than an economic rationality.''

The Venezuelan government, however, look at this as a golden opportunity to diversify the country's market and make friends with a more ideologically similar atuned counterpart.

A high-level PDVSA official, who spoke on condition of anonymity because he is not authorized to speak publicly to the media, told The Herald that analysts are making short-term assumptions about a long-term project with a partner that has massive potential for continued growth.

He also said PDVSA would swap oil -- a practice of trading products with third parties, in this case Russia, Indonesia, and Australia -- rather than shipping all the oil across the Pacific. He added that Venezuela was not going to cut the United States out as a buyer.

''The United States looks to diversify its buyers and sellers. Why shouldn't we?'' he said.

WIN-WIN SITUATION?

Indeed, analysts say both the United States and Venezuela could stand to diversify their markets and create what Goldman Sach's Ramos calls a ''win-win'' situation.

''In the end, we have to see this from a macro-oil perspective,'' he said. ``If there's a shortage in one place, there will be a surplus somewhere else. So it's not anything to be scared about.''

Still, there are question marks, not least of which is the health of Venezuela's oil industry. For exports to China to make economic sense, Venezuela would have to increase production. But currently the country, and in particular PDVSA, seems to be going in the opposite direction.

''It's not a good idea to use China to replace the American market right next door, especially if you don't have a policy to expand production,'' said Alberto Quirós, a former Shell and PDVSA executive. ``Without this, it's neither realistic nor economic.''

Herald special correspondent Phil Gunson contributed to this report.


6 posted on 8/17/2005, 6:24:28 PM by Cincinatus' Wife
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To: dennisw

Bump to post #6.


7 posted on 8/17/2005, 6:24:59 PM by Cincinatus' Wife
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To: bobbdobbs

Unless they go to China.


8 posted on 8/17/2005, 6:25:25 PM by Mr. Keys
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To: Cincinatus' Wife
In Venezuela, Pres. Hugo Chavez has taken the idea a step further, threatening to halt oil exports if alleged attacks on his country continue, according to Agence France Press.

Oh, please, do it, I beg you.

This, notwithstanding the fact that there haven't been any attacks on Venezuela from anyone other than Chavez and his merry band of Bolivarian retards. All of the damage done to Venezuela in the past half a decade can be laid at his feet. Indeed, terrible damage was done after his abortive coup in 1992 by other politicians trying to out-Chavez Chavez. After their dingbat populism wrecked the country, the real-McCoy took over and finished the job.

It is only the soaring price of oil that has forstalled complete collapse.

The threat to stop oil shipments is an empty one. It impresses only the economic illiterates among his Bolivarian street thugs and their equally illiterate pals in newsrooms across America.

9 posted on 8/17/2005, 6:25:38 PM by marron
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To: Cincinatus' Wife

With this and with his most recent anti-American statements, we now know where Hugo Chavez stands...He is steadily aligning himself as an enemy of the US in his populist/socialist rhetoric aimed at his domestic audience, and now he is taking a clearly anti-American stance in his foreign affairs as well. I am sure the upper/middle classes, industrialists and entrepreneurs are chafing under his reign. (And after all we have done for Venezuela...It's a shame.) I'm beginning to think, it's too bad the coup didn't get him back when it had the chance.


10 posted on 8/17/2005, 6:26:31 PM by Lone Red Ranger (Never let the weeds get higher than the garden...)
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To: Cincinatus' Wife

If they blackmail the west to get nukes, imagine the blackmail when they have nukes.


11 posted on 8/17/2005, 6:28:11 PM by Mr. Keys
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To: Cincinatus' Wife

I hope they do it, even the EU will get in on the action to take them out .


12 posted on 8/17/2005, 6:28:16 PM by John Lenin (Liberalism: Where shame is a virtue)
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To: Cincinatus' Wife

China is giving Venezuela, and a good part of South America, a choice. Sell them all the resources they can send, or get buried by the prices of slave labor. Poor as these countries are, they know that they can't compete with the Chinese labor price.

Chavez would just love to drive us to a recession.


13 posted on 8/17/2005, 6:30:06 PM by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: marron; Lone Red Ranger; All

***........Meanwhile, a story with the potential to be much more important is being ignored: The growing power and global ambitions of Venezuela's President Hugo Chavez.

To the minute number of people who understand the threat Chavez poses to the United States, his recent hosting in Caracas of Iranian President Mohammad Khatami was disturbing enough.

But a high-ranking official for a Latin American government has disclosed to me details about that visit that should send shock waves throughout our government.

During a private meeting between Chavez and Khatami, I was told, Chavez made it known to the Iranian leader that he would like to "introduce nuclear elements into Venezuela." My contact said "nuclear elements" meant "nuclear weapons."

It will be easy for many to dismiss such talk as false or the fantasies of a madman, but that would be a critical mistake. I have no doubt that Chavez is mentally disturbed, and I also have no doubt that his hatred of the United States and President Bush in particular is dictating his erratic behavior. High oil prices have made Chavez an antagonist to be reckoned with, and we ignore such a menace at our peril.

Standing side by side with Khatami in Caracas, Chavez said, "Iran has every right to develop atomic energy and to continue research in that area. ... Faced with the threat of the U.S. government against our brother people in Iran, count on us for all our support."

After receiving the report that Chavez might be trying to acquire nuclear technology or weapons from Iran, I met with a high-ranking U.S. official to voice my concerns and ask what he thought about such speculation. He answered me point blank: "It would not surprise me. Chavez is dangerous, underestimated and capable of almost anything. We are hearing a number of curious and disturbing reports. He is actively working to recruit terrorist nations and developing countries into his campaign of hatred against the United States."

Toward that end, Chavez recently went on al-Jazeera television to call for Arab and developing nations to unite against the United States and President Bush. Terrorists use this network as a tool against U.S. and coalition forces in Iraq, and Chavez told its viewers, "We have already invaded the United States, but with our oil."..........***

http://www.freerepublic.com/focus/f-news/1408818/posts

Is Iran helping Venezuela going nuclear?


14 posted on 8/17/2005, 6:31:42 PM by Cincinatus' Wife
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Comment #15 Removed by Moderator

To: Mr. Keys

See Post #14.


16 posted on 8/17/2005, 6:32:37 PM by Cincinatus' Wife
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To: bobbdobbs

Glad to see someone else here understands economics.


17 posted on 8/17/2005, 6:33:41 PM by Rodney King (No, we can't all just get along.)
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To: Cincinatus' Wife

Ah, geez. This guy just won't quit. He's determined to keep raising the ante until we pop him.


18 posted on 8/17/2005, 6:34:51 PM by marron
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To: msf92497
I think Noriega needs a prison bunkmate down in Miami. Chavez would do, nicely.
19 posted on 8/17/2005, 6:35:52 PM by Shqipo (Doing what I can to turn Maine back to Red.)
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To: dennisw

Bang on! I hope more people understand the string pulling coming out of China. They are not our friends.


20 posted on 8/17/2005, 6:40:44 PM by 7thOF7th (Righteousness is our cause and justice will prevail!)
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