Will Chavez pull the trigger? (On Oil)

LA Times ^ | 13 November 2007 | By Michael Rowan and Douglas Schoen

[shrinkermd]

On Dec. 2, Venezuelan President Hugo Chavez can tip the world into a recession.

On that day, if Venezuelan citizens pass the dozens of constitutional amendments on the ballot, Chavez will essentially be granted dictatorial powers -- an elected strongman reminiscent of Spain's Franco, Italy's Mussolini and Orwell's Big Brother. The day could easily deteriorate into one of violence, martial law and suspension of oil production, the latter calculated to inflict maximum damage on the U.S. economy.

With the price of oil hovering near $100 a barrel and markets skittish because of the sub-prime housing crisis (not to mention the stability of U.S. banks, the U.S. trade deficit, the weak dollar and deteriorating domestic consumer confidence), such a move on Chavez's part would go a long way in triggering a recession. An oil crisis during the Christmas season -- with its 40% share of annual retail sales -- would be especially detrimental in the U.S.

Rising oil prices have caused global recessions in the past. The Saudis and other oil-producing countries have tried to increase output to offset rising costs. But working against stability and for high oil prices are Chavez and Iran's Mahmoud Ahmadinejad, who are in a strategic alliance to push up the price of oil.

Oil economists calculate that on a supply-and-demand basis alone, the price of oil would be about $50; the remaining $45 in the current price is a political premium caused by uncertainty in the Israeli-Palestinian conflict, Iran's suspected nuclear plans, the wars in Iraq and Afghanistan and social unrest in Pakistan, Nigeria and Venezuela. But where the world sees a threat, Ahmadinejad and Chavez see opportunity: Civil discord lines their pockets.

[shrinkermd]

If Chavez acts, anticipate 5$ gasoline by Christmas.

[theDentist]

On that day, if Venezuelan citizens pass the dozens of constitutional amendments on the ballot,

If? The MSM don't think this will be a free election, do they? These "amendments" will pass in a landslide, thanks to his henchmen.

[ccmay]

Bring back imperialism. Conquer this pipsqueak.

-ccm

[NobleEagle2004]

Flood the Market with Iraq Oil! Now!
Thats what I say.

[Redbob]

The U.S. economy can survive the loss of Venezuelan oil.

Can the Venezuelan economy survive Chavez?

[babylucas]

Since oil is already close to $100 (even though it’s worth $50) we might as well bomb Iran now.

[SueRae]

“If? The MSM don’t think this will be a free election, do they?”

Don’t worry, word is that Jimmah will volunteer to be on hand to validate the election process./sarc

[Nextrush]

He can’t prop up Castro and export “revolution” without the oil revenue, but Chavez comes off as someone who may be crazy enough to cut it off under pressure.

[Malone LaVeigh]

On that day, if Venezuelan citizens pass the dozens of constitutional amendments on the ballot,

I don't know about anyone else, but I'd sure sleep better if I knew Jimmy Carter was overseeing this election. /sarc

[brownsfan]

Hey, he’s already trashed Venezuela’s economy, why not take ours down too?

[avacado]

"Oil economists calculate that on a supply-and-demand basis alone, the price of oil would be about $50; the remaining $45 in the current price is a political premium caused by uncertainty..."

After 20 years in the oil and gas industry, I agree.

[dusttoyou]

I’d sleep better knowing Jimmah was down there when all hell brokes loose and got caught up in it “terminally”.

[ClearCase_guy]

A lot of conservatives oppose a Manhattan Project by the federal government to find a way past our dependency on foreign oil (nuclear, methane hydrates, shale, whatever). There's the notion that economic problems are best solved by companies seeking profit, and the government should not involve itself.

I say it's a matter of national security. Oil revenies allow Saudi Araba, Russia, and Venezuela to fund a lot of bad things in the world. If oil became less valuable, our enemies would become less strong.

[trumandogz]

He only has to cut output by 10% and he will see oil prices increase by 15 to 20% therefore, you will be paying more for gas and he will be making more money than he is today.

[pepsionice]

Because of the unique nature of Venezuelan oil...there are so few countries who buy it...amongst them though...is the US. We need their oil to some degree....but if we stopped buying it...there would be a economic wave hitting the country within 30 days...and probably bring down the Chavez government.

[montag813]

All the more reason to drill like crazy, starting with ANWR. If Congress had approved ANWR 7 years ago as Bush proposed, then we would only be 3 years away from an oil flow now.

[Nextrush]

Yes, he may be smart enough to do that but he could also be crazy enough not to.

[Mojohemi]

five years the people of the USA has foot the bill, tresure/men to free iraqi’s ! not one drop of Oil from iraq has seen the shores of the USA! this kinda of politics leads people like the fruit cake called chavez to believe he can get away with anything!! and he can, just ask the lunatics in the democratic party.

[trumandogz]

Unfortunately, ANWR is only part of a much larger solution and would not free us of foreign oil.

[thackney]

The Saudis and other oil-producing countries have tried to increase output to offset rising costs.

Actually, they said they would not discuss raising output.

Saudi oil minister rules out oil output hike
http://www.freerepublic.com/focus/f-news/1924993/posts

SAUDI Arabia's oil minister ruled out a hike in oil production in response to soaring prices at an OPEC meeting this weekend in an interview published Tuesday.

Ali al-Nuaimi told the Financial Times business daily that "there will be absolutely no discussion'' of short-term supply at a November 17-18 OPEC summit in Riyadh by heads of state or oil ministers.