WCPO ED Note: This is a perfect example of "geopolitical factors" that can affect oil price and availability. Venezuela currently produces a total of approximately 2.5MB/d, of which 0.6MB/d is poor quality "heavy crude".
Venezuelan President Hugo Chavez has threatened to cut off oil supplies to the US if it continues what he calls an economic war.
"Take note Mr Bush, Mr Danger," said Mr Chavez in his weekly televised address. "I will cut off oil supplies."
British and US courts froze assets belonging to Venezuela's state energy company last week. The move followed an application by US oil giant Exxon Mobil for compensation from Venezuela's state oil company. The Texas-based company claims the amount offered for the nationalisation of its oil installations in Venezuela was insufficient.
Mr Chavez has said the nationalisation plan would bring billions of dollars of resources back to the people, a key part of his socialist revolution.
Imperialist bandits
In his address on Sunday, he described Exxon's management as imperialist bandits who form part of a US government-backed campaign to destabilise Venezuela.
"The outlaws of Exxon Mobil will never again rob us."
-Hugo Chavez, President of Venezuela
"I speak to the US empire, because that's the master: continue and you will see that we won't sent one drop of oil to the empire of the United States."
But the fight will be tough, says the BBC's James Ingham in Caracas. While Mr Chavez is a strong leader who rallies against what he calls the evils of capitalism, Exxon is renowned as a hard corporate player. And cutting off oil deliveries to the US would be damaging to Caracas as well as Washington.
While the US would struggle without the crucial oil supply, Venezuela would also suffer from losing its biggest oil customer.
The threat, then, may be too risky for Mr Chavez to carry out, and he has threatened to cut off his country's oil supplies to the US before.
Even if he does not, however, the latest outburst does highlight a growing ideological divide that daily shows little sign of easing.
Story from BBC NEWS:
