It’s as if the US economy was needing yet another setback after the “credit crunch” and soaring oil prices that bordered on the $100 a barrel. Last month President Hugo Chávez launched into an angry tirade about stopping oil exports to the US if petroleum giant Exxon Mobil succeeds in freezing billions of dollars in foreign petroleum assets controlled by Venezuela.

In fact, the warning sparked a fierce legal dispute between Venezuela and Exxon Mobil after Chávez’s attempts to impose bigger state control over his country’s oil industry last year. And instead of submitting to Venezuela’s terms, Exxon Mobil withdrew from a major production venture, which further intensified the dispute.

“The bandits of Exxon Mobil will never rob us again,” the enthusiastic Chávez said on his weekly television program. He accused the company and the American administration of conspiring to destabilize Venezuela. “I speak to the American empire, because that’s the master,” Chávez said. “Continue, and you will see that we won’t send one drop of oil to the empire of the United States,” he added. Referring to Exxon Mobil, the controversial president, whom the United States tried to topple before, noted that “they are imperialist bandits, white-collar criminals, corrupters of governments, over-throwers of governments.”

To the chagrin of Venezuela’s government, the giant oil company has recently won orders in British, Dutch and American courts to freeze $12 billion in Venezuelan oil assets abroad – refineries and other oil-related infrastructure that Venezuela owns. The Venezuelan government vowed to overturn the decisions before arbitration over Exxon’s attempts to win compensation for its nationalised oil project. Nevertheless, Exxon Mobil refused to comment following Chávez’s fiery comments.

As a matter of fact, this was not the first time Chávez threatened to stop oil exports to the US. He has repeatedly threatened to cut off oil supplies to the biggest importing country, but has never done so. And in spite of what seems to be a deterioration in political relations, the United States remains Venezuela’s top trading partner. In fact, it is the fourth largest supplier of crude oil to the United States, exporting 1.2 million barrels daily to American refineries.

The significant decline in oil production at the national oil company Petróleos de Venezuela has allowed other oil exporting countries like Saudi Arabia to gain a greater share of the market to meet the ever expanding global demand for oil, especially from China and India. The problems at Petróleos de Venezuela, a major hard currency earner for Venezuela, are occurring amid growing discontent over food shortages and inflation.

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