It leaves out a few points. Although Venezuela does in general have lower quality oil, not all its oil is heavy and sour; just most of the more recent discoveries that are a lot of the reserves but not so much of the production. Venezuela has not been a major oil producer since the early 1900’s because they only have undesirable oil. Also, other countries also produce heavy oil and there are refineries all over the world that can economically process it; just not most of the refineries. Currently most of Venezuelian oil is refined outside of the US. Lastly, Venezuela also owns refineries in Europe and the Caribbean.
http://www.freerepublic.com/focus/f-news/1930325/posts?page=32#32
I don’t think Chavez could carry out his threat. But he could partially cut back sales to the US without a great loss with the high price of oil these days.