Strike suspends Venezuelan oil exports to U.S

Strike suspends Venezuelan oil exports to U.S.

Higher prices likely at pump, as Bush team prepares for Iraq war

December 7, 2002

San Francisco Chronicle

Robert Collier, Chronicle Staff Writer

"There's a lot of nervousness on the markets about it because it comes at an inconvenient time, when war in Iraq looks close. If this doesn't get solved soon, the stakes are very high."

A war with Iraq is expected to cause a sharp rise in oil prices because of increased danger for shipments from the Persian Gulf. If this price spike is added to a spike caused by the Venezuelan crisis, prices could go through the roof, damaging the U.S. economy.


But it is People of Petroleum that matters. Unlike most oil firms, which hire shipping contractors for most or all of their transport operations, PDVSA owns and operates all of its tankers. Now, as if with a flick of the switch, People of Petroleum's captains and executives have shut down the refineries and exports.

"The management of PDVSA and the tanker captains have placed their political interests over their professional responsibility," said Mazhar Al- Shereidah, director of Petroanalysis, an oil-industry consulting firm, and a professor of petroleum economics at the National Central University in Caracas.

Al-Shereidah compared the standoff with the British crisis in 2000, when oil truckers blockaded fuel depots to protest high diesel prices. Although the British public supported the truckers, Prime Minister Tony Blair refused to negotiate, called out the military and broke the strike.

"No democratic government would allow political interference with a fundamental, complex industry that provides one-half of government revenue," he said.

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