[Marxism] Chavez sees $200 a barrel if Iran invaded

Walter Lippmann walterlx at earthlink.net
Wed Nov 14 09:58:37 MST 2007

Chavez sees $200 a barrel if Iran invaded
By Benedict Mander
The Financial Times
November 14, 2007

Hugo Chavez, Venezuela's president, has warned that oil prices could
reach $200 a barrel if the US invaded Iran.

He also said that Venezuela would propose at the Opec summit this
weekend a new method for measuring the price of oil and a formula to
protect poor countries from rising prices.

He told reporters in the capital that West Texas Intermediate, the
widely used crude oil benchmark, was "a very, very, very small
proportion if we compare it to the global daily production of oil . .
. so it is not the best indicator". He did not elaborate on
alternative indicators.

Mr Chavez also suggested that Opec should become a more important
player in geopolitics, and finance social development programmes for
poor countries in areas such as literacy, health, education and

The oil cartel should "go beyond just energy, it should have the
appearance of politics - even more so given the context in which this
summit will take place", he said.

Although Mr Chavez did not expand on his proposals for measuring the
oil price, he said it would not involve the creation of a new price
band for Opec crude.

Soon after he gained power in 1999, Mr Chavez managed to persuade
Opec to maintain oil prices at between $22 and $28. But while the
lower limit was kept, the upper limit was not.

Indeed, the Venezuelan president reiterated his long-held view that
oil prices would hit $100, although he believes that Opec should
attempt to stabilise prices at that level "for several years". This
"should prompt developed countries to moderate their consumption".

One of Mr Chávez's most important victories was to persuade Opec
countries in 1999 to adhere to production quotas, leading to one of
the largest non-war related price increases in the past decade.

However, an even greater leap could be possible, he warned. "If the
empire [the US] decides to invade Iran, surely oil prices could go as
high as $200 a barrel."

He offered to mediate between Washington and Tehran to ease tension,
but added that "no one has asked us for help". Mr Chavez is
currently acting as a mediator in the conflict between the Colombian
government and Farc, the leftwing guerilla group.

The Venezuelan president also repeated a long-standing threat to cut
off oil exports to the US should it decide to attack his country.
Caracas is already pursuing a policy of gradually reducing its
exports to the US in favour of China.

Venezuela, a founder member of Opec, is the fourth-largest supplier
of oil to the US, which receives about half of its production.

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