Venezuela crisis could send energy prices in U.S. climbing

Walter Lippmann walterlx at earthlink.net
Sat Dec 7 13:45:53 MST 2002


(The Herald tries to scare up popular
support for the right by raising fear
of increases in US gasoline prices as
an outcome of the Venezuelan crisis.

(The Herald wants readers to see the
fate of Washington's Iraq war tied to
the struggle in Venezuela. Washington
is blatantly backing the right by its
call for an early vote. We now see a
"liberal" trend joining the "Chavez
must go" claque, with voices such as
Delahunt and the Countil on Hemispheric
Affairs adding to the foul chorus.

(All blame Chavez when responsibility for
the violence is 100% with the opposition
and its relentless struggle to overthrow
the democratically-elected government.)
======================================

MIAMI HERALD
Posted on Sat, Dec. 07, 2002
Venezuela crisis could send energy prices in U.S. climbing
BY TIM JOHNSON
tjohnson at herald.com

WASHINGTON - As shooting broke out in Caracas and a general
strike paralyzed crude oil exports, concerns grew that
Venezuela's mushrooming political crisis could soon hit U.S.
consumers where it hurts -- in the pocketbook.

''If we see the oil supplies disrupted in Venezuela as we
march to war in Iraq, it seems to me like a Perfect Storm
scenario,'' said Bill O'Grady, a petroleum expert and vice
president at AG Edwards, a brokerage in St. Louis, Mo.

A fierce winter storm and the looming prospect of a U.S.-led
war against Iraq underscored American reliance on Venezuela,
which supplies the United States with 13 percent of its
crude.

Paralyzed by a general strike entering its sixth day,
violence erupted when shots were fired into a crowd of
protesters. At least three people were killed, and more than
25 injured. The escalating violence is causing concerns
throughout the hemisphere. Six South American presidents at
a regional summit in Brasilia said they were worried about
the situation in Venezuela.

César Gaviria, secretary-general of the Organization of
American States, denounced the killings and called for
''calm and a language of harmony and mutual respect'' from
political leaders. He scheduled a negotiating session
between officials of Chávez's government and opposition
leaders Friday night. News reports said the six presidents
also discussed calling an emergency session of regional
foreign ministers under OAS's auspices.

Administration officials in Washington reiterated that they
believe Chávez must call an early vote to mollify his foes
and end the country's crisis.

THE SOLUTION

''We think the solution is electoral, however the
Venezuelans work that out,'' a senior administration
official said, speaking on condition of anonymity.

A bipartisan delegation of three U.S. congressmen involved
in U.S.-Venezuelan issues called off a trip to Caracas on
Friday, apparently warned away by U.S. Ambassador Charles
Shapiro.

''He asked us not to come today -- for our own safety,''
said Rep. Cass Ballenger, a North Carolina Republican who
chairs the House Western Hemisphere subcommittee.

Another member of the delegation, Rep. William Delahunt, a
Massachusetts Democrat, exhorted the Bush administration to
focus more deeply on the Venezuela crisis.

''We've got to escalate our engagement,'' Delahunt said.
``This has to be addressed by the White House and the
highest levels of government.''

Oil markets remained jittery about events in Venezuela, the
world's fifth largest oil supplier. In trading in New York
on Friday, prices of January crude futures fell 36 cents to
$26.93 per barrel, a day after they rallied on fears that
Venezuelan oil exports might be shut down.

''We monitor potential disruptions to U.S. and global energy
markets, so we're following these developments closely,''
State Department spokesman Richard Boucher said.

U.S. experts said they worry that Venezuela's crisis may
careen out of control.

''They are as close to the precipice of civil war as you can
get. All you need is someone to strike a match,'' said
Miguel Diaz, who is in charge of the South America program
at the Center for Strategic and International Studies in
Washington, D.C.

Chávez, a one-time paratroop commander, upended a political
system widely viewed as corrupt after his 1998 election.
While failure to bring economic growth has cost Chávez
popularity, he holds hard-core support among 25 percent to
32 percent of Venezuela's 24 million people, primarily the
poor. Business owners, professionals and many others in the
middle and upper classes loathe him.

Chávez was briefly overthrown in April by a civil-military
uprising but returned to power after two days. Since then,
he has purged the armed forces of opponents.

The current crisis is marked by the entrenched positions of
Chávez, who claims that the constitution legitimizes his
leadership, and his most prominent opponent, Carlos Ortega,
leader of the powerful Venezuelan Confederation of Workers,
which wants a referendum to force his removal.

''They are typical machistas unwilling to lose any face
here,'' Diaz said.

A growing number of U.S. observers said they see potential
for prolonged, and possibly bloody, civil confrontation in
Venezuela.

''The worst-case scenario is that Venezuela devolves into
some sort of civil war and that it becomes as ungovernable
as Colombia, which is really possible,'' said O'Grady, the
oil analyst.

Opponents to Chávez ''smell blood,'' O'Grady added, and
intransigence may grow if violence erupts. If that happens,
he said, ``You'll have people who support Chávez who accept
no one other than him. And the people who want him out will
accept no deals. Then, it's civil war.''

WARNING OF A COUP

Despite purges in the ranks of the military, the liberal
Council on Hemispheric Affairs, a Washington advocacy group,
warned that a coup against Chávez may occur.

''The protracted general strike, now going into its fifth
day, seems to be achieving a critical mass of the political
propulsion needed to pressure the Venezuelan armed forces to
seize power after ousting Chávez, if only briefly, to spare
the country a social, political and economic breakdown,'' it
said in a statement.

Lack of flexibility on all sides ''could ignite class
warfare,'' it added.


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