A vote on removing Venezuelan President Hugo Chavez from office could well roil the oil-hungry US economy which is heavily dependent on the south American country's crude exports, analysts warned Friday.
Chavez agreed to respect Thursday's verdict by Venezuela's National Electoral Council that there were sufficient validated signatures on petitions for a referendum that could remove him from office.
The constitutionally mandated recall was the agreed-upon alternative to growing violence, strikes and a short-lived coup two years ago aimed at ousting Chavez. A general strike in late 2002 and early last year paralyzed Venezuela's oil sector.
"If there is another disruption to Venezuelan oil exports, the US administration would this time use the Strategic Petroleum Reserve [SPR]," said Julian Lee, an analyst at the Centre for Global Energy Studies in London.
"They would have to do that in order to make sure that there wasn't a physical shortage of oil in the United States," he said referring to the SPR, an emergency US oil stockpile.
Venezuela exports 1.34 million barrels of oil a day to the US, some 13 percent of total US crude imports, according to a March estimate by Petroleum Supply Monthly.
Washington successfully lobbied the OPEC this week to raise its output as many Americans, topping up their gas-guzzling vehicles, felt the pinch of rocketing fuel costs ahead of the fast-approaching US presidential election.
Lee said past political instability in Venezuela has had a dramatic effect on oil prices, citing the oil workers' strike in 2002 and early last year that he said added US$6 to the price of a barrel.
"This would have serious consequences" if repeated, he stressed. Confirmation of the recall vote and subsequent events could be "very unsettling," said Fadel Gheit, a New York-based oil analyst with the Oppenheimer Fund.
If the recall vote results are contested by either side, "you are going to see demonstrations and probably another strike which could bring oil exports down and that could push prices higher," Gheit explained.
He recalled prior threats from Chavez to reduce oil exports in retaliation for what he contends is Washington's interference in Venezuelan politics.
"As long as George Bush is president of the US and Hugo Chavez is the president of Venezuela, I assume the relationship between the two countries is not going to be any better," said Gheit.
Marshall Stevens, an oil trader for Refco in New York, said concern exists, but noted there had been no material impact on the Venezuelan oil industry yet.
"For the moment it doesn't look like it's going to have a material impact on oil production as was the case with the general strike early last year," he said.
STEADY: Prices are to rebound following inventory rebuilding demand, TrendForce said, with Samsung Electronics Co further trimming capacity as it slashes DDR4 lines The contract prices of DRAM chips are to rise by as much as 18 percent sequentially this quarter — the first price upticks in about eight quarters — driven mainly by inventory rebuilding demand for DRAM chips used in mobile devices and PCs, TrendForce Corp (集邦科技) projected yesterday. The price rebound is led by a quarterly increase of mobile DRAM chips, which are to climb between 13 percent and 18 percent quarter-on-quarter this quarter, which has not been seen since the fourth quarter of 2021, the Taipei-based market researcher predicted. Likewise, the price of mainstream PC DDR4 DRAM is expected to bounce
CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security. Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.” The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role. In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence
A Hong Kong court postponed a court hearing on troubled Chinese property developer Evergrande Group’s (恆大集團) winding-up petition scheduled for yesterday until Jan. 29. Evergrande is trying to win support from its creditors for a plan to restructure more than US$300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan. The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan (陳靜芬) had said in October that yesterday’s hearing would be the last before a decision is handed down. Chan
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime
RSS