Oil Soars on Iraqi Move, Venezuela Fears

yahoo.com ^ | Apr 8, 2002 7:05 AM ET | Tom Ashby - Reuters

[Cincinatus' Wife]

LONDON (Reuters) - World oil prices soared on Monday when Iraq announced an immediate suspension of oil exports in protest at Israel's incursion into Palestinian controlled areas of the West Bank.

The news prompted a frenzy of buying by traders who already feared a halt in shipments from the world's No. 4 crude exporter Venezuela.

International benchmark Brent crude oil jumped $1.01 to $27.00 per barrel by midday in London, resuming an assault on a six-month high of $28.15 seen last week.

U.S. crude futures rose 73 cents to $26.94.

Iraqi leader Saddam Hussein said all oil exports were suspended from Monday for a month or until Israel withdrew unconditionally.

Israeli Prime Minister Ariel Sharon vowed to press ahead with its sweeping military offensive in defiance of U.S. demands for a withdrawal.

OPEC Secretary-General Ali Rodriguez (Venezuela) said he will consult with cartel oil ministers on Tuesday and the group could hold an emergency meeting to decide policy.

Sanctions-bound Iraq is the sixth largest oil supplier to the United States, and ships four percent of world exports. Saddam has already called on other Arab producers to embargo the West for its support of Israel, and Libya has backed the call.

Fellow Gulf oil exporter Iran has said a total blockade by all Islamic states would be very a effective weapon, and supreme leader Ayatollah Ali Khamenei called on Friday for Arab states to launch a one month embargo on the West.

The world's No.1 exporter Saudi Arabia has said it had ample capacity to respond to any major disruption.

Industrialized countries fear high oil prices could damage the nascent economic recovery.

VENEZUELAN CONFUSION

Industry sources said Venezuelan oil loadings were halted at the weekend and oilfield output was already down by half, although the Venezuelan leader insisted on Sunday that production and exports were normal.

Venezuelan state oil company executives are protesting against the government's choice of a new board of directors.

Oil market traders said as many as 25 empty oil tankers were at Venezuelan ports waiting to load on Sunday, and one source said production was already cut by 60 percent.

Venezuela supplies about 15 percent of U.S. oil imports. Latest U.S. government data shows it accounted for about 1.4 million barrels per day of crude imports and another 300,000 bpd of products such as gasoline and diesel.

President Hugo Chavez announced the sacking of seven dissidents from the state oil company on Sunday, labeling them "saboteurs."

The Organization of the Petroleum Exporting Countries has cut production by five million bpd since January 2001 to buoy prices, and in March agreed to extend output restrictions until at least its next meeting in June.

Russia and Norway, which both agreed to join OPEC in crude supply curbs, said on Monday it was too early to reconsider the policy now.

[Cincinatus' Wife]

Chavez strikes back at protesting oil execs - tankers unable to load

[Cincinatus' Wife]

FARC: Rebel-camp allegations fuel tension in Venezuela

Chavistas Attack Venezuela's Congress - Bolivarian neighborhood groups inciting wholesale violence

[SICSEMPERTYRANNUS]

Let's roll

[MississippiMan]

I thought Iraq was long since barred from exporting oil anyway other than in limited cases.

/SARCASM OFF

MM

[finnman69]

Here come the $3.00/ gallon proce tages this summer. This will have huge implications for the 2002 election. Watch California.

[jayef]

Exactly. I mean, I thought we were starving Iraqi children. The media wouldn't lie about such a thing, would they?

[CaptRon]

Fine. We should embargo any and all types of aid to countries participating in this stoppage.

[Cincinatus' Wife]

Sarcasm is right. The people of Iraq starve while Saddam builds "palaces" and subidizes terrorists. Hardly money from oil to be used for humanitarian reasons.

[Cincinatus' Wife]

Looks like a line is being drawn in the sand.

[Fresh Wind]

Be sure to write Senator Dashole to thank him from blocking all efforts to expand our domestic oil exploration and production.

[Cincinatus' Wife]

Saddam announces cut in oil exports to support Palestinians - oil disruption in Venezuela**My post - It would jolt our economy and our national security. It definitely would take some doing to get our own supplies up and running. This could push more Democrats out of the Senate. They've been nothing but obstructionists to Bush's energy plan. You'd almost think they're in cahoots with the Arabs, Chavez and all anti-American groups. We need to stay strong militarily. We may have to go secure our oil supply.

[MeekOneGOP]

http://www.reuters.co.il/news2000/N2S8IG40.HTM

UPDATE 3 - Oil soars on export halt by Iraq and Venezuela

    (Updates price in paragraph 2) 
    By Tom Ashby 
    LONDON, April 8 (Reuters) - World oil prices soared on 
Monday when Iraq announced an immediate suspension of oil 
exports in protest at Israel's incursion into Palestinian 
controlled areas of the West Bank. 
    The news prompted a frenzy of buying by traders already 
spooked by a halt in shipments from the world's No. 4 oil 
exporter Venezuela. 
    International benchmark Brent crude oil jumped $1.28 to 
$27.27 per barrel by mid-afternoon in London, resuming an 
assault on a six-month high of $28.15 seen last week. 
    U.S. crude futures rose 99 cents to $27.20. 
    Iraqi leader Saddam Hussein said all oil exports were 
suspended from Monday for a month or until Israel withdrew 
unconditionally. 
    Sanctions-bound Iraq is the sixth largest oil supplier to 
the United States, and its two million barrels a day of exports 
account for four percent of oil traded worldwide.  
    Israeli Prime Minister Ariel Sharon vowed to press ahead 
with its sweeping military offensive in defiance of U.S. demands 
for a withdrawal. 
    Venezuelan shipments to the world market were at a 
standstill on Monday after halting over the weekend, and 
refineries reduced their processing rates. 
 State oil company executives in Latin America's top oil 
exporter, another key supplier to the United States, are 
protesting the government's choice of a new board of directors. 
    "I'm surprised markets have taken this so calmly," said Paul 
Horsnell of investment bank J.P. Morgan. 
    "Certainly there is potential for spike up to $30." 
    Prospects of higher energy costs also hit global equities 
markets, as traders fear damage to the world economic recovery. 
But oil company shares bucked the trend, rising sharply. 
    U.S. Energy Secretary Spencer Abraham said the U.S. economy 
and national security were vulnerable to the Iraqi export halt. 
    OPEC Secretary-General Ali Rodriguez said he will consult 
with cartel oil ministers on Tuesday and the group could hold an 
emergency meeting to decide policy. 
    The Arab dominated cartel controls two-thirds of world oil 
exports and could easily replace lost Iraqi and Venezuelan 
barrels after cutting five million barrels of daily production 
since January last year. 
     
    EMBARGO CALL 
    Saddam has already called on other Arab producers to embargo 
the West for its support of Israel, and Libya and Iran have 
backed the call. 
    However, OPEC heavyweights Saudi Arabia and Kuwait have both 
said they would not join any Iraqi stoppage. 
    Both these countries rely heavily on the United States for 
their defence. 
    Oil market traders said as many as 25 empty oil tankers were 
at Venezuelan ports waiting to load, and one source said 
production was already cut by 40 percent. 
    Venezuela supplies about 15 percent of U.S. oil imports. 
Latest U.S. government data shows it accounted for about 1.4 
million barrels per day of crude imports and another 300,000 bpd 
of refined products such as gasoline and diesel. 
    President Hugo Chavez announced the sacking of seven 
dissidents from the state oil company on Sunday, labelling them 
"saboteurs." 
    The Organisation of the Petroleum Exporting Countries has 
cut production by five million bpd since January 2001 to buoy 
prices, and in March agreed to extend output restrictions until 
at least its next meeting in June. 
    Russia and Norway, which both agreed to join OPEC in crude 
supply curbs, said on Monday it was too early to reconsider the 
policy now. 
    ((London newsroom +44 20 7542-8185, fax +44 20 7542 4453, 
london.energy.desk@reuters.com)) 
 
08 APR 2002 14:50:16
UPDATE 3-Oil soars on export halt by Iraq and Venezuela

[MeekOneGOP]

President Hugo Chavez announced the sacking of seven dissidents
from the state oil company on Sunday, labelling them "saboteurs."

Or, in plain English, 'entrepreneurs' or 'capitalists'.........

[GuillermoX]

As Daschle continues his obstruction to decreasing our demand for foreign oil...

[Cincinatus' Wife]

[ President Hugo Chavez announced the sacking of seven dissidents from the state oil company on Sunday, labelling them "saboteurs." ]

Or, in plain English, 'entrepreneurs' or 'capitalists'.........

Yes indeed. Chavez likes the communist way of digging yourself into moral and economic Bankruptcy.

EX-president of Venezuelan state oil company accuses government of eroding morale- ***Other bones of contention were the central government's demand that the company hand over $4.4 billion in dividends last year, forcing PDVSA to borrow $500 million to pay the bill; and the oil sales to Cuba, whose leader, Fidel Castro, is Chavez's longtime mentor. · Chavez has insisted that oil sales continue to Cuba, despite an unpaid $97 million bill for past sales. ***

[Cincinatus' Wife]

Bump!!

[Osinski]

Ping

[Bill Davis FR]

its time to stop buying middle east oil...

[Osinski]

Or, in plain English, 'entrepreneurs' or 'capitalists'........

Another word for scumsuckin' thievin' international oil companies. It's apparent you believe Venezuela's oil belongs to the oil companies, not to Venezuela. Not to worry your pretty little head about it. It's already been decided that if President Chavez doesn't want to go along with this arrangement, he can have a tragic fatal "accident", and a president more in keeping with the wishes of big oil will be brought in in his place.

[biblewonk]

I'm watching the news to see if Iran and Lybia join in the embargo. This is getting interesting.

[The Great Satan]

It's apparent you believe Venezuela's oil belongs to the oil companies, not to Venezuela.

Damn straight, it does.

[biblewonk]

I seriously doubt that Saudi will backfill any oil production cut by their fellow muslim countries. Saudi gave us the taliban. The oil princes love american money but the rest of the people of Saudi don't like us at all. If the oil family tries to backfill they will be stabbing their own people and all the rest of the muslims who hate us in the back.

[biblewonk]

Does anyone think Bush will continue to back Israel? He is trying to babysit the economy and not make the mistakes his dad did. Supporting Israel is counter productive to our economy and the media knows it. Watch the Media turn on Isreal and try to force Bush to do the same.

[Kakaze]

" its time to stop buying middle east oil... "

Heres a thought.......Why doesn't "dubya" come out with a JFK type plan like apollo?

We announce that all these mexicans that want work can have it : in ANWAR!

Build the rigs the infrastructure and use OUR own resources to build our future, while at the same time expanding tax credits for solar and wind power......and yes nuclear power.

We got to the moon in ten years...we can power ourselves in the same amount of time or less!

If it means we sacrifice for a few years so be it....this is war, plant a victory garden tighten your belt and act like Americans.

[biblewonk]

We got to the moon in ten years...we can power ourselves in the same amount of time or less!

Yes we did and yes we could, and it would be fun too.

[Osinski]

Yeah, well I don't want to hear your bitchin when your chip implanted kids belong to the state.

[MeekOneGOP]

Or, in plain English, 'entrepreneurs' or 'capitalists'........

Another word for scumsuckin' thievin' international oil companies. It's apparent you believe Venezuela's oil belongs to the oil companies, not to Venezuela. Not to worry your pretty little head about it. It's already been decided that if President Chavez doesn't want to go along with this arrangement, he can have a tragic fatal "accident", and a president more in keeping with the wishes of big oil will be brought in in his place.

My opinion is that the free market is the most efficient method, you know "the invisible hand?"
Perhaps my knowledge of politics and the oil industry in Venezuela are weak, but my post was
intended to convey that the free market should be allowed to operate. If that wasn't clear, then I
hope this will clarify that.

PS: My head's not to purty anyway...
:O)

[SamAdams76]

It's apparent you believe Venezuela's oil belongs to the oil companies, not to Venezuela.

It seems to me that if Venezuela is going to allow the oil companies to expend their capital to drill these oil wells and build all the facilities that go with it, that yes, the oil companies do have a right to that oil. It requires an enormous amount of capital to get an oil well producing and a lot of oil needs to be pumped out before this investment is paid for. If Venezuela has a problem with this, they should have done it themselves. As it stands, I'm sure Venezuela is well compensated by the oil companies for the use of their resources and they apparently didn't even have to put any money up front (I'm just assuming on that last point because if Venezuela had the capital to do it themselves without involving US corporations, they would have done so).

[Free the USA]

Check the Bump List folders for articles related to and descriptions of the above topic(s) or for other topics of interest.

[The Great Satan]

Yeah, well I don't want to hear your bitchin when your chip implanted kids belong to the state.

Deal.

[Redcloak]

Time for Russia to step in and fill the gap. That would be good for them and good for us. They get hard currency and we get a more reliable source of oil. We also get to stick it to the Arabs.

[SamAdams76]

We got to the moon in ten years...we can power ourselves in the same amount of time or less!

Good post. I also believe it is possible to eliminate our dependence on Middle East oil if we commit to it as a nation in the same manner we committed to landing on the moon back in the 1960s. It would be priceless to see the reaction of the Middle East to such a proclamation!

As well, it would be nice for the United States to start paying more attention to its neighbors (like Mexico) and give them a chance to become wealthy nations. Make Mexico successful and our current border/immigration problems with them will be resolved.

[hchutch]

I'm hoping for a fatal "accident" myself, but not over the oil issue.

Instead, it's due to Mr. Chavez's support for FARC, which has threatened to run terrorist operations against targets in the U.S.

[Kakaze]

Sam, It would be great to turn a generation of immigrants into educated, soundly employable Americans..it would give us all a boost and its how this country was built to begin with.......Irish german Chineese and some I'm sure i forgot built our railroads.

I think part of the pay would be 5 years and you and your "Immediate" family....wife and original kids...are full citizens.

From other post today we are giving enough welfare and banking privledges, plus now state college tuition away....Wouldn't it be a good thing for this generation to know they made a difference?

[Osinski]

So because the lumber companies have the equipment to harvest your timber, they own it and dictate the amount they will pay you for it?

[Cincinatus' Wife]

It's apparent you believe Venezuela's oil belongs to the oil companies, not to Venezuela.

The oil is in Venezuela and Chavez's government takes the lion's share while the companies do the hard work of getting it out of the ground. It wouldn't do Chavez much good if it sat in the ground.

[Cincinatus' Wife]

The oil princes love american money but the rest of the people of Saudi don't like us at all.

The clerics have the people at their command while the princes have the money from oil sales.
It wouldn't serve the princes to annoy the clerics. So it is a wait and see situation.

[Cincinatus' Wife]

****Russia and Norway, which both agreed to join OPEC in crude supply curbs, said on Monday it was too early to reconsider the policy now. ****

[buffyt]

True! Know what? I noticed you had some typos and that is fine. I make typos all the time, too. No big deal. But there is one freeper who will write a nasty reply about our spelling. I am thinking that freeper is some kind of lonely, sad, pathetic, bitter old man who needs to chill out!!!! & he needs to get a life too. I see all kinds of typos, puncuation errors, etc. here and I don't care. My sister is brilliant and she can't spell worth a whit! Reading her letters is wild! Seems like the smarter a person is, the more mistakes he/she makes in writing. And the morons always find fault with the smart ones anyway....

[Cincinatus' Wife]

Venezuela Leader Targets Protest (Mon Apr 8,10:03 AM ET ) - By ALEXANDRA OLSON, AP [Full Text] CARACAS, Venezuela (AP) - President Hugo Chavez dismissed seven dissident oil executives, moving to crush a revolt against the leadership of Venezuela's state oil monopoly that threatened the production of one of the United States' top crude suppliers.

Chavez also announced Sunday that he had forced the retirement of 12 other employees at Petroleos de Venezuela, or PDVSA, and warned there would be more firings if the monthlong protest continued.

But rebellious workers - who are upset by recent government appointments to top company posts they say were political - ignored his threats, staging a rowdy protest at the company's Caracas headquarters.

Unionized workers and business leaders plan to support PDVSA dissidents with a 24-hour nationwide strike Tuesday. It will be the second time since Chavez took office that unions and business leaders join forces to strike.

The conflict has handed Chavez one of the biggest challenges of his three-year-old presidency. Oil accounts for a third of the South American nation's gross domestic product and 80 percent of its exports. Venezuela's crude reserves are the largest outside the Middle East.

The five-week labor slowdown has forced operators to scale back production at the Paraguana refinery complex, which produces 70 percent of Venezuela's refined products, according to company sources who have spoken on condition of anonymity.

The refinery was producing at about 50 percent of capacity Monday as loading for six vessels came to a halt, company sources told Dow Jones Newswires on condition of anonymity. Operators had decreased production over the weekend to prevent an accident as labor unrest slowed the flow of gasoline and oil.

Chavez, however, insisted that operations were normal in most of the industry. He vowed not to cave in to PDVSA's "elite," whom he accused of trying to preserve corporate privileges by "sabotaging" the oil industry.

Chavez angered longtime PDVSA executives by naming five of his own political allies to the board of directors and leftist Gaston Parra as company president. Chavez insisted Sunday that he needs political loyalists to trim corporate spending and increase PDVSA contributions to government coffers - a goal he considers key to his promises to combat poverty and corruption.

PDVSA "has always been managed by a political elite," Chavez said during his weekly radio address. "The plan is to return the oil industry to Venezuelans."

In a separate news conference Sunday, Parra said the board of directors will ensure PDVSA complies with Venezuela's policy of strict adherence to production quotas set by the Organization of Petroleum Exporting Countries. Parra accused longtime employees of resisting the policy, which he said has been proven successful by a recent rise in international oil prices.

Fired executives included Juan Fernandez, Horacio Medina, Eddy Ramirez, Gonzalo Feijoo, Alfredo Gomez, Carmen Elisa Hernandez and Edgar Quijano. Chavez did not announce replacements but said he had a long list of qualified professionals who were willing to take the jobs.

Last week, thousands of PDVSA workers stayed home, closed gates to facilities and slowed gasoline and tanker deliveries. On Sunday, they answered Chavez's threats by banging pots and pans and chanting "not one step backward" at PDVSA's Caracas offices.

At least a dozen vessels were waiting for operations to resume at two of five main export terminals for crude oil and refined products - El Palito in central Venezuela and Puerto La Cruz in the east.

Created in 1976 and admired for its efficiency in a nation riddled with corruption, the multinational Petroleos de Venezuela has grown to become one of the United States' largest suppliers of oil. [End]

Employees of Petroleos de Venezuela, or PDVSA protest outside of an executive office in Caracas, Venezuela, Monday, April 8, 2002. Venezuelan President Hugo Chavez dismissed seven dissident oil executives, moving to crush a revolt against the leadership of Venezuela's state oil monopoly that threatened the production of one of the United States' top crude suppliers. (AP Photo/Fernando Llano)

[buffyt]

Sam, you are RIGHT ON!!!! Great suggestions, become less dependent on Mid East oil and help Mexico become wealthy nation! Would love to see how the Oil Cartel responds to that one if it happens!

[Willie Green]

Related threads:

Venezuela President Fires Oil Execs
US takes role in Colombia to new level
BP Cuts 500 North Sea Oil Jobs

---

U.S. Petroleum & Crude Oil Overview
(thousand barrels per day)

	1960	1965	1970	1975	1980	1985	1990	1995	2000
U.S. Crude Oil Production	7,035	7,804	9,637	8,375	8,597	8,971	7,355	6,560	5,834
U.S. Petroleum Imports	1,815	2,468	3,419	6,056	6,909	5,067	8,018	8,835	11,093
Total	8,850	10,272	13,056	14,431	15,506	14,038	15,373	15,395	16,927
Imports as % of Total	20.5	24.0	26.2	42.0	44.6	36.1	52.2	57.4	65.5

As North Sea oil production continues to decline, America's dependence on imported petroleum will shift even more towards OPEC. While drilling offshore and in ANWR may help, it would still be insufficient to dramaticly reduce our ever-increasing consumption.

The obvious solution to this dependency would be to begin construction of modern, efficient mass-transportation systems in our nation's most densely populated regions and urban areas. Electricly powered light rail, high-speed rail and maglev systems could be easily fueled by clean-coal and nuclear technology power plants.

Unfortunately, RINOs have been bought-out by Big Oil special interests. Alaskan representative Don Young, who chairs the House Committee on Transportation and Infrastructure, continues to sidetrack and delay implementation of energy efficient mass-transportation systems. A whole contingent of Nevada RINOs unite to obstruct our nation's efforts to utilize abundant nuclear power. And Dubya's own sibling, Jeb, brags about his obstruction on his re-election website:

Protecting Florida’s Coasts From Offshore Drilling – Thanks to Governor Bush’s hard work and leadership, Florida’s coastal and marine resources will continue to be free from the threat of offshore drilling. Protections secured by Governor Bush far exceed those agreed to by former President Clinton, former Interior Secretary Bruce Babbitt, and the late-Governor Lawton Chiles.

[buffyt]

I was at a local Lincoln Day Dinner where T. DeLay was guest speaker. He said there is a stack of papers sitting on Daschle's desk that Congress sent up to the Senate and Daschle won't let the Senate vote on them. They have to do with national security among other things. But Daschle is the obstructionist!

[finnman69]

Here come the $3.00/ gallon price tags this summer. This will have huge implications for the 2002 election. Watch California.

Is that better.. LOL.

I don't want to infuriate any SPELL NAZIS out there!

[backhoe]

Since my wife ( now me, since she can't drive... ) does a 50-mile commute to work, this will only hurt us.

For nearly 2 years I have lobbied those clowns in DC and Atlanta to "drill like crazy for more oil & gas, go nuclear, and slash taxes & regulations so business can do their job of employing more people...."

SamAdams76 has the right vision- when our neighbors like Mexico do better, so do we...

[Cincinatus' Wife]

The obvious solution to this dependency would be to begin construction of modern, efficient mass-transportation systems in our nation's most densely populated regions and urban areas. Electricly powered light rail, high-speed rail and maglev systems could be easily fueled by clean-coal and nuclear technology power plants.

The last time I was in England the cost of a train ticket had soared and the condition of the subway system was critical- overcrowded with service interruptions due to strikes. I think it's too easy to control the movement (or non-movement) of people when you control their mode of transportation.

[Cincinatus' Wife]

For nearly 2 years I have lobbied those clowns in DC and Atlanta to "drill like crazy for more oil & gas, go nuclear, and slash taxes & regulations so business can do their job of employing more people...."

And you've been right. Don't give up the battle!!

[rmlew]

Liberate Venezuala.

[buffyt]

Actually it didn't bother me the way you first wrote it. As long as I can read the stuff here I don't care how it is spelled. I figure we are all passionate about what we are saying and we type in a hurry. I find typos in my replies all the time, right AFTER I hit the Post button! There is a newbie named SPELL CORRECTLY who signed on at FR on March 30 and went through and posted replies anytime he found a typo, calling the typos Misspelled Words. I thought that was a new screen name and it was. He was only around for that one day. I am pretty sure I know who it is too! Have a great day and spell anyway you want to!!!! If we are irriating SPELL CORRECTLY, GOODIE!!!!! LOL