Venezuela Crisis May Hit U.S. Iraq War Plans

Yoshie Furuhashi furuhashi.1 at
Tue Dec 17 12:19:37 MST 2002

The following news items concern a factor that can go either way,
hardening or softening the US stance toward Venezuela.  So far, it
appears to have softened it (as it has been combined with Latin
American nations' rejection of the US initiative on Venezuela, the
Venezuelan armed forces' -- including the commander's -- loyalty to
Chavez, etc.), though, at the same time as increasing national and
international skepticism about the US war on Iraq.  A win-win
situation for us?

*****   16 Dec 2002 21:16
Venezuela crisis may hit U.S. Iraq war plans
By Pascal Fletcher

CARACAS, Venezuela, Dec 16 (Reuters) - Venezuela's oil strike, which
has cut off over 13 percent of U.S. petroleum imports, may force
Washington to hold back from launching a war against Iraq until the
crisis in the South American oil producer is resolved, a Venezuelan
energy expert said Monday.

Humberto Calderon Berti, a former Energy Minister, said he believed
it would be too risky for the United States to move against Baghdad
at a time when the turmoil in the world's No. 5 oil exporter was
choking off key shipments to the U.S. market.

Venezuela's leftist President Hugo Chavez, who survived a brief coup
in April and is resisting intense pressure to resign, is fighting to
beat the two-week-old opposition strike that has cut oil output to
less than a third and brought exports to a virtual standstill.

"I believe the United States won't make any war decision against Iraq
until the situation in Venezuela is resolved," Calderon, who has also
served as president of the giant Venezuelan state oil firm PDVSA,
told Reuters in an interview.

"It looks to me very difficult to be able to press ahead with a
military initiative in Iraq when you have Venezuela going through a
situation of immense instability," he added.

Talks between the government and opposition representatives, brokered
by the Organization of American States, have so far failed to reach
an accord on an electoral solution to the Venezuela crisis.

Calderon said a full-scale U.S. war against Iraq, if it was launched
while the crisis in Caracas was still halting Venezuelan shipments,
could mean at least five-and-a-half million barrels of oil per day
being cut off from the market.

Venezuela has a total output capacity of more than three million
barrels per day (bpd) and Iraq, the world's eighth largest exporter,
sells about 1.2 million bpd to international markets.

Between them, the two OPEC members cover roughly 7 percent of the
world's more than 76 million bpd of crude oil demand.

This could also push oil prices skywards to as high as $40 a barrel,
pressuring the U.S. and world economy. "We'll be heading for a
tremendous crisis,' Calderon said.

Pushed to two-month highs by the Venezuelan oil drought, U.S. crude
oil futures settled Monday at $30.10 a barrel, up $1.66 or 5.8

The conflict in Iraq also risked dragging in other big producers in
the Middle East, disrupting supplies from a region that produces a
third of the world's oil.


Calderon said there had been a "change in attitude" by U.S. President
George W. Bush's administration towards Venezuela's crisis, from a
more neutral U.S. position a few weeks ago to a public call on Friday
for early elections to solve the conflict.  [Yoshie: Washington has
since been forced to backtrack from that position, however.]

"It is very important for them to understand that the presence of
Chavez in Venezuela is destabilizing," he added.

Opponents of Chavez, who was elected in 1998 promising to carry out a
"revolution" to help the poor, accuse him of ruining the economy and
dragging Venezuela towards Cuba-style communism. They also say he has
weakened the country's traditional alliance with the United States by
forging closer ties with anti-U.S. states like Libya, Iran and Iraq.

"There has never been an oil industry strike in Venezuela like the
one we have now ... and while Chavez remains in power, this will be a
recurring event," Calderon said.

A U.S. diplomatic envoy, Thomas Shannon, visited Caracas at the end
of last week and urged both Chavez's government and the opposition to
reach a negotiated political deal on elections.

Shannon said Washington was very worried about a possible escalation
of the political confrontation in Venezuela but denied that his visit
was directly linked to U.S. plans to launch a possible strike against

Former paratrooper Chavez, who says the strike is an attempt by his
foes to overthrow him again, has deployed troops to try to move
strike-bound tankers and restart idled refineries and oil loading
terminals. He has also said he will bring in foreign oil experts if
necessary to beat the strike.

The Venezuelan oil strikers, who include PDVSA executives, tanker
captains, navigation pilots and refinery and port terminal operators,
have said they will stay out until the Venezuelan leader agrees to
quit and hold early elections....

<>   *****

*****   Tuesday, 17 December, 2002, 14:43 GMT
Venezuela crisis 'may affect US war plans'
Strikes have severely disrupted Venezuelan oil supplies

By Andrew Walker
BBC World Service business correspondent

The continuing strike in the Venezuelan oil industry could have an
impact on preparations for a US war in Iraq.

Humberto Calderon Berti, a former Energy Minster and senior official
of Venezuela's state oil firm, has said he does not think the US will
make a decision to proceed until the crisis in his country is

Venezuela accounts for about 13% of US oil imports - and foreign
supplies are about half of the US' total needs.

Venezuela's oil industry has been severely affected by a political strike.

Oil refinery managers and oil tanker captains have joining a strike
led by right-wing business groups, and more than 40 oil tankers are
reportedly anchored off Venezuelan ports waiting to take on oil

Looking further afield

Venezuela is the world's fifth largest oil exporter.

So the loss of Venezuelan supplies would be disruptive at the best of times.

The main alternative source is the Middle East, which has two major drawbacks.

Shipping oil from the Gulf to the US takes much longer, up to 60 days

And in any case, a war in the region could disrupt supplies from the
Gulf as well.

Iraq's relatively modest current supplies would be likely to stop altogether.

Stock building

Other countries too could be affected especially if their oil
installations were attacked by Iraqi missiles.

The combined impact of the war risk and the strike in Venezuela has
pushed the price of crude oil higher.

Some grades of oil have been trading in New York at more than $30 a barrel.

And it is likely that if and when the conflict begins, oil prices
will rise further still.

The US does have a large strategic reserve it can draw on and has
recently been adding to it as an insurance against war-related

The US administration could almost certainly go to war at a time when
both Venezuela and Middle Eastern supplies were unreliable.

But it would surely prefer not to.

<>   *****

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