White House shows "concern" over ongoing Venezuela political crisis

Dec. 18, 2002
US policy-makers are worried that a widespread strike by Venezuelan oil workers could impact US energy markets if the situation isn't resolved soon.

By OGJ editors

WASHINGTON, DC, Dec. 18 -- US policy-makers are worried that a widespread strike by Venezuelan oil workers could impact US energy markets if the situation isn't resolved soon.

"It is a concern," said a White House spokesman Tuesday.

"We're following the events in Venezuela very closely when it comes to the energy situation, Venezuela being a major exporter to the United States," the spokesman said.

US officials said that the Department of Energy has been monitoring events to determine if the US would suffer "negative impacts" on oil supplies if there is a "prolonged" disruption in Venezuelan oil exports.

White House officials said the US government recently took what it views as a "proactive" step to mitigate possible supply problems. DOE is deferring 6.5 million bbl of deliveries into the Strategic Petroleum Reserve, now at 86% of its capacity, until September 2003. But US officials stopped short of suggesting any kind of US supply crisis is expected because of Caracas's woes; they noted that DOE is not currently considering either a release or exchange of oil due to the temporary loss of Venezuelan crude (OGJ Online, Dec. 9, 2002).

Market worries
DOE, however, could find itself under increasing pressure to consider an SPR drawdown if oil prices continue to climb. US crude prices moved past $30/bbl in response to the Venezuelan work stoppage—now in its third week with no signs of waning. Most of the state oil company's workers, from top executives to the rank and file, remain deeply unhappy with the way leftist Venezuelan President Hugo Chávez has been running the state petroleum company, Petroleos de Venezuela SA (PDVSA). Chávez is said to be mulling a declaration of a state of emergency that expands his powers and limits the civil rights of the country's citizens.

Last Friday the US called for early elections to resolve the stalemate. But the White House was also careful not to explicitly endorse a coup d'etat or "unconstitutional alteration" of the country's constitution.

"The Venezuelan people must be able to decide which democratic, constitutional electoral option is most viable to resolve the crisis peacefully," US Department of State officials said.

"We recognize the situation in Venezuela is volatile; it's deteriorating rapidly," a state department spokesman said. "The United States believes that a solution must be found quickly to avoid further polarization that could erupt into violence. "

US State officials note they are concerned that a growing gasoline shortage in Venezuela may exacerbate an already dangerous situation.