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Mon, Mar 07, 2005 - Page 12 News List

Chavez proclaims era of cheap oil over

ENERGY THREATS The Venezuelan president said OPEC could set prices between US$40 and US$50, while the US said its oil imports from the country were replaceable

AP AND AFP , NEW DELHI AND CARACAS

Venezuelan President Hugo Chavez said Saturday that the Organization of Petroleum Exporting Countries could fix a price for oil in a range of US$40 to US$50 per barrel, adding low petroleum prices were a thing of the past.

Chavez's comments come ahead of a crucial OPEC meeting in Iran on March 16. Some analysts are expecting the cartel to cut production to boost oil prices, which have skyrocketed over the past year on supply worries.

Venezuela, the world's fifth-largest oil exporter, has been consistently pushing for higher oil prices. Venezuela currently produces more than 3 million barrels of crude oil a day.

"The era of cheap oil is over," Chavez told reporters in New Delhi.

"The world should forget about cheap oil. It will never go back to the US$10 per barrel rate that prevailed in those days," he added.

Chavez didn't elaborate on how OPEC would introduce a trading range for oil prices, which are currently set by the market.

Chavez, who is on a four-day state visit to India, said he was considering increasing oil trade with countries like India and China to ensure their fast economic growth.

"Venezuela will now help the Southern Hemisphere countries with its oil more than it has helped the United States," he said.

"America wants to keep all the good things in the world for itself. But we will not let them do it," he said.

Relations between the US and Venezuela have deteriorated steadily since Chavez took office in February 1999. He has repeatedly accused Washington of trying to destabilize his government. The US State Department has rejected the allegation.

Separately, the US will buy crude from another country if Venezuela follows through on President Hugo Chavez's threat to cut off supplies, the US ambassador to Caracas said in interviews with local media.

Venezuela supplies the US market with 1.5 million barrels of crude a day -- about 15 percent of its crude needs, or nearly as much as Saudi Arabia supplies to the US.

Chavez has threatened to cut off that supply if there is any US "aggression," such as a military invasion or an attempt on his life.

"If the United States does not buy oil from Venezuela, it will buy it from another country," US Ambassador William Brownfield said in an interview with Globovision television news. He gave a similar assessment in interviews with local newspapers that were published on Saturday.

In Caracas, Brownfield acknowledged that a suspension of Venezuelan imports would initially "distort" the US economy, but dismissed it as a minor blip. "In the end, a free market can accommodate such a distortion," he said.

Washington wants to maintain its current relationship with Caracas, Brownfield said, adding that the White House is "analyzing options" in the event that there is a cut in supplies.

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