Chavez threatens to cut Spice if U.S. questions vote

[Strelnikov_]

Time to load the Imperial Sardaukar onto the Heighliners.


http://www.cnn.com/2007/WORLD/americas/11/30/venezuela.protest/index.html

Chavez told a crowd gathered in the center of Caracas that if the referendum was approved and the result was questioned -- "if the 'yes' vote wins on Sunday and the Venezuelan oligarchy, playing the empire's game, comes with their little stories of fraud" -- then he would order oil shipments to the United States halted Monday.


The spice must flow! - Big Oil . . . oops . . . Spacing Guild

He who can destroy a thing, controls a thing - Muad'Dib

[whistle]

1. Just like "Dune"

[mike098762001]

2. Hugo Chávez Alleges Conspiracy to Make Him Paranoid

http://www.scrappleface.com/?p=2799

[Name removed]

14. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Warren Stupidity]

15. Kick!

Uh, did you intend to post this?

[petronius]

3. Nice analogy - except that we really do have Sardaukar, and

Chavez doesn't have Fremen (or a Muad'dib)...

[Strelnikov_]

5. Oh . . . My . . . n/t

[thepurpose]

4. Is that Scary Spice?

[paulk]

6. that's an empty threat

without that oil money, Chavez and his "revolution" go down the tubes....

[Viva_La_Revolution]

7. I don't think he'd have problems finding another buyer.

do you?

[cali]

9. Oil is fungible. That's the bottom line. n/t

[paulk]

20. I think his hands are tied by the special circumstances

of Venezuelan oil.

In five years, not so much, but right now he's just bluffing.

[Pavulon]

12. No matter..the pusher man

does not control the market for his product. So if a buyer was willing to pay more for chavista crude (to get there) then they free up the supply they were using.

It is a great system. It makes morons like chavez irrelevant.

Maybe he should spend some time developing other sectors of his economy before he cuts off his biggest source of dollars. How will he play animal farm without an underwriter.

Maybe the service sector or manufacturing sector will fill the petro sector...Or not.

[paulk]

19. yes, he will.

Do some research on VZ oil. It's tar. It cost more to process and sells for less because of that. It takes special refineries to process, most of which are in the US. It would take several years for other nations to invest in and bring new refineries online - Chavez doesn't have the cash reserves to wait ... he needs the oil money right now - it's the only real export VZ has.

It's an empty threat he's making - mostly to stir up his supporters with some anti-American rhetoric just before an election (or referendum). Politicians do this sort of thing all the time.

[Viva_La_Revolution]

21. I did. China has been buying lots since Dec. 2004

5th largest oil producer in the world, we get 13% of our oil from Venezuela.
China just recently hosted the first Heavy Oil Conference...

A unique feature to the World Heavy Oil Conference & Exhibition is the endorsement of leading world heavy oil nations, such as China, Canada, Russia, Venezuela, and Brazil to name a few, who actively support the endeavour via the provision of senior executives and officials offering their expertise during the planning process.
http://www.whoc-conference.com/newsinfoe.asp?id=202

July report...
Venezuela has signed new supply agreements with China, India, Jamaica, Haiti, Paraguay, and Bolivia. The country's output is not growing because of a lack of investment in new production, so supplies to those countries come at the expense of the exports to the U.S.
http://www.bloomberg.com/apps/news?pid=20601086&refer=latin_america&sid=a_H7VhJXt_6I

Many analysts also believe that the concentration of Venezuela's oil refining capacity in the United States further hinders the reorientation of the country's oil exports away from the United States. Yet, Venezuela is involved in a myriad of new refinery projects in Asia, the Middle East and in Latin America. These new and upgraded refineries will all have the capacity to process Venezuela's crude oil. Meanwhile, Venezuela has been gradually unloading its U.S.-based oil refineries and terminating its long-standing gasoline supply contracts.
http://www.pinr.com/report.php?ac=view_report&report_id=572&language_id=1


It will put more of a crimp in our style than in his, and he knows it.

[Pavulon]

23. I assume those nations have tar refineries

online? Probably not. So they can not easily refine Venezuelan oil into usable products.

"Dude in Red, we call.."

[Viva_La_Revolution]

25. check my edit:

last link

[paulk]

24. from your article

"So far, Chavez doesn't have the ability to abruptly suspend sales to the U.S. without damaging his own economy. Petroleos de Venezuela would be unable to find buyers for most of the 2.1 million barrels of crude oil it exports today, said Juan Carlos Sosa, president of Grupo Petroleo YV, a Caracas-based energy consultant. Potential customers, including China, don't have sufficient capacity to process the most common Venezuelan crude oil grades, he said.

Heavy Crude

``Chinese refineries can't process Venezuelan crude, which is heavy in metals and sulfur,'' said Sosa. ``Chinese refineries are still geared toward lighter crudes,'' such as those produced by Nigeria, the sixth-biggest producer in the Organization of Petroleum Exporting Countries.

Building the refinery units needed to handle cheaper, stickier, high-sulfur crude oil from Venezuela will take years, Sosa said. In the U.S. some refineries have been upgraded specifically to handle Venezuela's output.

Sales to Asia also make more sense if and when Venezuela builds a pipeline to the Pacific across neighboring Colombia. Such a pipeline, which would cost up to $4.7 billion, would shave nearly 10 days off the trip to China, making crude sales more economical.

Most supertankers can't fit through Panama Canal, forcing them to go around South America to reach China after loading at Caribbean ports.

``A pipeline to the Pacific is the only way selling oil to China would make any economic sense,'' said Williams. ``Then again, Chavez makes decisions time after time that make no sense economically.''


-------------------------


Didn't Hugo just cut off relations with Columbia? I guess that nixes the pipeline....

[robcon]

8. The oil market is totally fungible.

He can sell his oil to anyone, as the sources and destinations shift slightly. They can sell more to China, for example, and the only negative is higher freight rates.

It's the same as the U.S. embargo on Iranian oil... we get the same amount of oil, at the same price, while Iran sells its oil elsewhere.

So Chavez is acting as if it matters economically where he ships the oil. It doesn't - except in his megalomaniac mind.

[madokie]

11. he just knows it cost more to ship oil from the ME than it does Venezuela

its the statement being said not the price being paid

[Pavulon]

13. A saudi twitch in output

wipes out any move he makes. He is a pissant dopeman. We can always hit speed dial to get our fix..

[Warren Stupidity]

17. Assumes saudis have a twitch left.

Not a great assumption. Plus it would cost the Saudis billions if they did actually manage to increase output.

[Pavulon]

18. No, they would profit...

if napoleon the pig cuts supply the price would go up, globally. The rest of the suppliers would release excess capacity, which saudi, and others have. They all cash in if he shorts the supply line.

So they would make all billions. Saudi can turn up a 500k bpd out of ghawar.

[MikeDuffy]

10. Certainly oil money allows him to help his people and others (including here)

but don't you think with the arrival of the peak oil plateau that there is no lack of oil buyers elsewhere?

[papau]

16. Chavez has made a solid threat - A US refinery set up for Venezuelan oil would have a hard time

changing.

In the long run, it is a threat without any reality as we can buy from anywhere - and making the refinery changes would not take too too long -

but short term it would be one hell of a disruption.

[Solar_Power]

22. Absolute power corrupts absolutely