How’s the diversification thing going, Hugo?
Over at Duck of Minerva, Peter Howard explains why Hugo Chavez’s plan to diversify oil exports away from the United States will not work. This bit from a linked Washington Post story was particularly interesting: During most of Ch?vez’s eight years in office, more than 60 percent of the country’s total crude exports have gone ...
Over at Duck of Minerva, Peter Howard explains why Hugo Chavez's plan to diversify oil exports away from the United States will not work. This bit from a linked Washington Post story was particularly interesting: During most of Ch?vez's eight years in office, more than 60 percent of the country's total crude exports have gone to the United States, up from 50 percent throughout much of the 1990s, according to Ram?n Espinasa, a former chief economist at PDVSA who is now a consultant in Washington. The trend is due to growing U.S. demand, Venezuela's rising consumption and what oil analysts say is the state's inability to diversify its base of clients to include big consumers. But in an ideologically drawn battle, one marked by constant verbal slings, Ch?vez has promised to veer sales away from the United States. He often says that PDVSA is considering selling Citgo, its refining and retail arm in the United States, which processes and sells the extra-heavy brand of crude mined in Venezuela. His government has also increased sales to China, with 300,000 barrels a day now headed there, Rafael Ramirez, the energy minister and PDVSA's president, said in an interview this month.... So a country less capable of producing oil, analysts say, is more tied to the United States, where refineries wholly or partly owned by PDVSA refine Venezuela's molasses-like oil. The installations exist nowhere else, which makes some analysts skeptical that Venezuela is exporting as much to China as it claims.Here's an interesting (and purely hypothetical) question: if Chavez is so gung-ho to nationalize the energy sector in Venezuela, what would happen of the United States government chose to nationalize Citgo?
Over at Duck of Minerva, Peter Howard explains why Hugo Chavez’s plan to diversify oil exports away from the United States will not work. This bit from a linked Washington Post story was particularly interesting:
During most of Ch?vez’s eight years in office, more than 60 percent of the country’s total crude exports have gone to the United States, up from 50 percent throughout much of the 1990s, according to Ram?n Espinasa, a former chief economist at PDVSA who is now a consultant in Washington. The trend is due to growing U.S. demand, Venezuela’s rising consumption and what oil analysts say is the state’s inability to diversify its base of clients to include big consumers. But in an ideologically drawn battle, one marked by constant verbal slings, Ch?vez has promised to veer sales away from the United States. He often says that PDVSA is considering selling Citgo, its refining and retail arm in the United States, which processes and sells the extra-heavy brand of crude mined in Venezuela. His government has also increased sales to China, with 300,000 barrels a day now headed there, Rafael Ramirez, the energy minister and PDVSA’s president, said in an interview this month…. So a country less capable of producing oil, analysts say, is more tied to the United States, where refineries wholly or partly owned by PDVSA refine Venezuela’s molasses-like oil. The installations exist nowhere else, which makes some analysts skeptical that Venezuela is exporting as much to China as it claims.
Here’s an interesting (and purely hypothetical) question: if Chavez is so gung-ho to nationalize the energy sector in Venezuela, what would happen of the United States government chose to nationalize Citgo?
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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