Thu, May 26, 2011 - Page 7 News List

Irate Venezuelans lash out at US over PDVSA sanctions

Reuters, CARACAS

Venezuelan President Hugo Chavez reacted with predictable fury at “imperialist” sanctions by Washington over Venezuela’s ties with Iran — but does not look ready to jeopardize his huge oil trade with the US.

Venezuelan officials from Chavez down lined up to condemn the measures against state oil company PDVSA, which were announced by the US government as punishment for two shipments to Iran of an oil blending component worth US$50 million.

“This is an aggression against Venezuela and against OPEC,” Venezeulan Energy Minister Rafael Ramirez said, likening the sanctions with US pressure on Iran over its nuclear policy and the battle to topple Libya leader Muammar Gaddafi.

Out of the public eye for once due to a knee injury, Chavez popped up on Twitter to condemn the “new gringo aggression” and “imperialist government.”

Beyond such rhetoric, however, pragmatism probably will again prevail on both sides, analysts say.

US President Barack Obama’s government wanted to send a strong message to Venezuela, while avoiding further upset to oil markets or a cutoff in supplies from one of its top five suppliers.

So the sanctions, while showing disapproval of Chavez’s ties with Tehran, were relatively soft in practice. They bar PDVSA — but not its US-based CITGO subsidiary — from US contracts and financing. Oil sales are not affected.

“This was just a rap on the knuckles,” analyst Angel Garcia Banchs said. “In practice, the company is not affected.”

There is no way, analysts say, that Venezuela is about to cut off commercial ties with the nation that buys about 45 percent of its crude and helps keep the economy afloat.

“Chavez will have a lot to lose if the Obama administration imposes further sanctions, either in terms of oil exports or debt issuance,” the Eurasia Group said.

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