Displaying a lack of understanding of basic economics not surprising for someone who works for Hugo Chavez, the Venezuelan oil minister on Sunday threatened to cut the United States off from Venezuelan crude, if Washington continues its "hostile policy" towards Caracas.
If only the U.S. were more hostile.
Regardless, crude oil is a "fungible commodity" — all the oil from all the producers that sell it is put into one big pot. From there, buyers buy it for as low a price as possible; and sellers sell it for the most they can get. As a practical matter, only the market decides who gets what.
Of course, Chavez could cut what Venezuela puts into the market, punishing the United States, and the rest of the world, with higher prices for gasoline and other products. That's the way the law of supply and demand works.
But it also likely would have a detrimental effect on Venezuela's bottomline, hurting Chavez at home — just before December's elections — and limiting his ability to spread his largess — and his large ass — around the world.
Venezuela has nothing but oil to sell to the world.
More than anyone, Chavez knows that it is American dollars — and European Euros and other currencies used to buy oil — that are financing his "revolution."
Cut off oil shipments to the United States, if such a thing were really possible, and Chavez would also be hurting himself.
Chavez would have been wise while in Tehran this weekend to ask his Iranian soul brothers about whether and how to use oil as a weapon to make a political point. For all the pressure the mullahs have felt regardng their nuclear program, and all the bluster from their president, Tehran has not made threats to cut off oil shipments to the world.
After all, Iran has nothing else but oil to sell to the world, either.
As with so much that comes out of Chavez and his regime, the latest from the oil minister is just more crazy talk.
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