VENEZUELA-US:
Escalating Tensions Kept in Check by Oil
Humberto Márquez

CARACAS, (IPS) - The U.S. government of George W. Bush, which has labeled President Hugo Chávez its biggest worry in Latin America, has now begun to lobby allies in a diplomatic campaign to counter the Venezuelan leader.

But oil ties have marked relations between Venezuela and the United States for 90 years. Venezuela, Latin America's top oil exporter, sells the United States 1.5 million barrels of crude a day, representing 24 billion dollars in export revenues last year, as part of 38 billion dollars in overall bilateral trade, according to the Venezuelan-American Chamber of Commerce.

Relations between the two countries have been tense for years. However, the confrontation has escalated since 2004, when Chávez scored a landslide victory in a presidential recall referendum organised by the opposition, and stepped up his "anti-imperialist" crusade in the region. For its part, Washington expanded the reach of the largely U.S.-financed counterinsurgency and anti-drug Plan Colombia to countries bordering that nation caught up in a decades-long armed conflict.

Furious that Chávez has backed Iran's right to develop nuclear energy, U.S. Secretary of State Condoleezza Rice said Thursday that Venezuela's relationship with Cuba is "particularly dangerous," and called on the international community to form a "united front" against Chávez.

"The international community has just got to be much more active in supporting and defending the Venezuelan people," Rice said during an International Relations Committee hearing in the U.S. House of Representatives.

The official, who early last year described Venezuela's charismatic leftist leader as a "negative force" in the region, now stated that his government "is attempting to influence Venezuela's neighbours away from democratic processes."

On Friday, the Chávez administration demanded that the Bush administration "stop meddling" in Venezuelan affairs.

Early this month, U.S. Director of National Intelligence John Negroponte told the Senate Select Committee on Intelligence that "Increased oil revenues have allowed Chávez to embark on an activist foreign policy in Latin America that includes providing oil at favourable repayment rates to gain alliesà."

"He also is seeking closer economic, military, and diplomatic ties with Iran and North Korea," Negroponte added.

On Wednesday, Venezuela and Iran set up a 200 million dollar joint development fund.

Caracas has also stated that it will buy military planes and ships in "Russia, China or elsewhere," if Washington is successful in its attempts to torpedo planned purchases from Spain and Brazil.

Venezuela "is not looking for war with anyone," retired army general Alberto Müller told IPS. "The idea that it could pose a threat to the United States is crazy. Washington, on the other hand, declared war on the rest of the world when it assumed the right to attack any state because of any activity seen as a potential danger to its security."

The 70-year-old retired officer was named the president's security and defence chief of staff last week.

When asked about the possibility of a U.S. invasion or war, Müller said that although the U.S. military has intervened 27 times in the region, "at this time the likelihood is small, due to Bush's unpopularity around the world and the opposition to him within the United States, and because the U.S. armed forces are in an extremely difficult situation."

"They can't even recruit enough replacement forces to send to Iraq," he added.

That scenario is also unlikely because "Venezuela is not the same thing as Grenada (invaded by the U.S. in 1983), Panama (invaded in 1989) or Nicaragua (targeted by the U.S.-funded ‘contra' fighters during the 1980s, after the triumph of the Sandinista revolution)," he said. "We have very complex geographical characteristics, and of course conventional weapons would not be useful in that sort of eventuality."

Chávez recently stated that "the best way to avoid a conflict is to be prepared."

In response to Negroponte's remarks and to statements by U.S. Defence Secretary Donald Rumsfeld, who compared him to Adolf Hitler, Chávez said that "if they want to break off relations, let them. I would not hesitate to close the eight refineries we have in the United States."

CITGO is a subsidiary of Petróleos de Venezuela S.A. (PDVSA), the Venezuelan state-owned oil company. It operates eight refineries, processes over a million barrels of oil a day - two-thirds of it from Venezuela û and supplies roughly 14,000 service stations in the southern, southeastern and eastern United States.

But former CITGO president Luis Giusti maintains that even if Venezuela did take that step, Washington could invoke U.S. law to keep the refineries open. Moreover, it would be difficult for Venezuela to find other markets for its heavy crude, which few refineries in the world are able to process like those in the United States owned by CITGO.

If the supply of oil was cut off by Venezuela, which produces 3.2 million barrels a day according to government figures (the International Energy Agency, an intergovernmental body of the industrialised nations, estimates its output at only 2.6 million), the price of crude would skyrocket from its current level of around 60 dollars a barrel to no less than 110 dollars.

As a result, oil plays a primary role in the Caracas-Washington conflict as a weapon that Venezuela can threaten to use against the United States, and as a major reason to avoid a total rupture in relations.

Proof of this was provided by a meeting held Tuesday in Washington between the Venezuelan ambassador to the United States, Bernardo Álvarez, and U.S. Assistant Secretary of State for Western Hemisphere Affairs Thomas Shannon.

Commenting on the meeting, the U.S. ambassador to Venezuela, William Brownfield, stressed: "We have disagreements in connection with some issues; there are discrepancies, but at the same time we have historically cooperated in other fields," such as energy, trade and the fight against drug trafficking.

Álvarez had spent three years fruitlessly requesting such a meeting, to begin to address these "discrepancies."

In the meantime, to demonstrate that Venezuela firmly believes that the government of the United States is one thing and the people of the United States another, CITGO has begun to sell heating fuel at discount prices to low-income communities in several large U.S. cities.

But despite these timid moves towards rapprochement, new frictions continue to emerge on a monthly, weekly, and sometimes even daily basis.

On Wednesday, while Brownfield was reporting on the Shannon-Álvarez meeting, the U.S. ambassador to the United Nations, John Bolton, publicly announced his opposition to Venezuela's bid to become a non-permanent elected member of the U.N. Security Council..

Venezuela is lobbying to take over the seat that will be vacated in late 2006 by Argentina, which is currently in its second year as a representative of the Latin American and Caribbean group of nations on the Security Council, alongside Peru.

"The United States, traditionally, does not say what countries it votes for, but I don't think there is any mistake that Venezuela would not contribute to the effective operation of the Security Council," said Bolton.

"I think we can see that from their actions in the past six months in the General Assembly, which have been unhelpful," he added.

Venezuela has opposed the United States in almost all votes taken in the General Assembly, while Chávez has called for the elimination of the right to veto enjoyed by the Security Council's permanent members, which include the United States.

In previous months, the loudest clashes between the two governments were sparked by weapons purchases. Venezuela bought 100,000 Kalashnikov AK-103 assault rifles and 40 helicopters û of which the first 10 are to be delivered this year û from Russia, as well as arranging the purchase of six corvettes for coastal patrols and 12 transport planes from Spain.

Venezuela, which shares a lengthy border with civil war-torn Colombia, also plans to import a fleet of Super Tucano combat planes from Brazil for training and border patrol purposes.

In response, the United States has been pressuring Moscow û unsuccessfully so far û not to go through with the sale of assault rifles, while prohibiting the Spanish firm CASA and Embraer of Brazil from using U.S. technology in the planes to be sold to Venezuela, which has posed significant hurdles.

Washington also refuses to sell replacement parts to Venezuela for the U.S.-made F-16 fighter planes it already owns, on the grounds that the Chávez administration acts as a destabilising and subversive force in the region û a claim that Caracas steadfastly refutes.

Another major bone of contention between the two countries is the U.S.-backed initiative to create the Free Trade Area of the Americas (FTAA), a free trade bloc that would encompass all of the countries of the hemisphere except Cuba. While fiercely opposing the FTAA, Venezuela has also spearheaded attempts to promote regional integration initiatives that do not include the United States.

The strong ties shared by Chávez and Cuban President Fidel Castro, Washington's long-time adversary, add further fuel to the fire of U.S.-Venezuelan conflict.

María Teresa Romero, a professor of post-graduate studies in international affairs, commented to IPS that "Venezuela has made progress backed by the favourable winds of oil prices, but in the case of a confrontation that would entail choosing between Caracas or Washington, it would undoubtedly lose."

For his part, Carlos Romero, director of post-graduate studies in political affairs at the Central University, remarked that the Venezuelan government "is striving to construct a counter-agenda, taking advantage of the fact that this is not the best time for the United States when it comes to its relations with the international community."

Nevertheless, he added, "Washington will not allow Caracas to serve as a landing strip for other radical experiences, and it will apply tourniquets to prevent this."

One of these "tourniquets" is undoubtedly the "united front" recommended by Rice.