Chavez using oil in battle with U.S.

By JOEL BRINKLEY

MCCLATCHY-TRIBUNE NEWS SERVICE

Venezuelans will vote Sunday on a referendum ginned up by their president, Hugo Chavez, that could make him a constitutional dictator for life. Polls suggest the referendum will fail, and let’s hope they are correct.

Chavez remains a favorite of the American left because he redistributes some of Venezuela’s oil profits to the poor. Much of that money comes from his own personal oil-wealth slush fund of $14 billion a year. But I don’t think most people realize that this loud-mouthed megalomaniac holds a gun to America’s head.

Judging Chavez by his rhetoric, nothing would please him more than to engineer “the fall of the American empire,” as he put it during an OPEC conference in Saudi Arabia last week. That would assuage the grudge he holds for America’s purported role in the coup that briefly removed him from power five years ago. But even more, Chavez wants to demonstrate that his brand of dictatorial socialism is a superior form of government.

All of this might seem like the amusing yet irrelevant rantings of still-another Latin despot posing as a populist. But Chavez is different. He sells more than 1 million barrels of oil to the United States every day.

What would happen if he decided one day to close the spigot?

In a general sense, oil is a zero-sum market. If Chavez stopped shipping oil to the United States and instead sold it elsewhere, in theory that would replace oil in the same quantity that could then be sold to America. But this assumes that the international oil market is a smooth mechanical machine. In fact, these days oil markets are as volatile as stock markets. Prices rise and fall on perceptions and emotions.

Large price spike

Chavez’s move would certainly cause a large price spike — one that Chavez would undoubtedly welcome. Additional billions would flow into his slush fund. (By the way, Transparency International’s index of corrupt states says only 17 of 179 nations listed are more corrupt than Venezuela.)

What if Chavez simply held back the oil and for a while decided not to sell it to anyone else — forcing the United States and other countries to claw at each other to replace the lost supply. Given the jittery state of world oil markets, the price of a barrel would shoot through the roof. And with America teetering on the edge of recession because of the sub-prime credit crisis and other economic problems, Chavez could throw the American economy into turmoil. With it, economies in Europe, Asia and much of the world would tumble too.

Chavez would pay a heavy price. Even if he were to divert his oil from America to other buyers, the cost of shipping would rise, and he might not easily find refineries willing to handle his heavy crude. If he were to reduce production and take that oil off the market, he would damage his own economy.

No rational leader would do this. But the point is: Chavez is not rational.

Would a rational leader send masked thugs to fire pistols into crowds of students holding peaceful rallies — and then call the wounded students “rich bourgeois brats”?

Would a rational leader stand before the United Nations and complain about “a stench of sulfur” left by President Bush — at the very time Venezuela was trying to win a seat on the Security Council? (Venezuela lost the seat.)

Would a rational leader alienate the kings of Spain and Saudi Arabia, the president of Colombia and Venezuela’s Roman Catholic Church, whose senior clergy he called “dolts and retards” — all within a matter of weeks?

Sworn enemy

No, Chavez is not rational, and he remains fixated on the United States as his sworn enemy — even though the State Department’s policy toward Venezuela is to ignore his taunts and try quietly to improve relations.

At a campaign rally on Monday, Chavez described the growing multitudes of Venezuelans who oppose his naked power grab as “insane crowds poisoned by media campaigns and U.S. scripts.”

His constitutional revisions, if approved, would exempt him from term limits. He would gain greater control of the nation’s economy and take full control of Venezuela’s central bank.

X Joel Brinkley is a former Pulitzer Prize-winning foreign correspondent for The New York Times and now a professor of journalism at Stanford University.