Friday, May 27, 2011

Oily conflict with Venezuela

The current flap between the United States and Venezuela, where the U.S. is imposing sanctions on PDVSA, almost immediately brought up the elephant in the room: co-dependency.

The U.S. sanctions PDVSA, but this only prevents it from pursuing contracts in the U.S. and getting credit and licenses.  They very specifically have no impact on the flow of Venezuelan oil to U.S. consumers, who don't care where their gas comes from as long as it doesn't keep going up in price.

Meanwhile, Hugo Chávez got so mad that he started...tweeting. That included threatening (as he periodically has done over the years) to cut off oil exports.  But he can't do so without seriously disrupting the Venezuelan economy.  Venezuelans don't care who they're selling to as long as the revenue comes in.

Americas Quarterly makes the interesting point that the U.S. is also sanctioning companies in Israel and the United Arab Emirates.


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