Should U.S. cut Venezuelan oil imports?

Posted on Wednesday, 02.26.14

Should U.S. cut Venezuelan oil imports?
BY ANDRES OPPENHEIMER

Some conservative members of the U.S. Congress are asking the Obama
Administration to impose economic sanctions against Venezuela, starting
with a 10 percent cut in U.S. oil imports from that country.

But that would be a bad idea. There are much smarter things that the
U.S. government could do.

"I would like to respectfully request that the United States government
immediately reduce by at least 10 percent our oil imports from
Venezuela," Miami congresswoman Ileana Ros-Lehtinen (R-Miami) wrote in a
Feb. 18 letter to U.S. Secretary of State John Kerry.

In a later statement, she said the measure would "send a signal of
support to those being oppressed" by Venezuelan President Nicolás
Maduro. Congressman Mario Diaz Balart (R-Miami) supports the partial oil
embargo idea, while other Republicans, including Sen. Marco Rubio
(R-Fla.) are calling for unspecified U.S. sanctions against the Maduro
government.

They say that the deaths of at least a dozen people who were
demonstrating in peaceful marches, the country's recent expulsion of
three U.S. diplomats, Maduro's censorship of the press, and the recent
arrest of opposition leader Leopoldo Lopez require a stronger U.S.
government response.

Many Latin American experts in Washington agree that the Obama
Administration cannot look the other way as peaceful protesters are
massacred by government-supported armed thugs.

But critics say there are several reasons why cutting U.S. oil imports
from Venezuela would be a bad idea.

First, a partial or total U.S. oil embargo would give Maduro a huge
propaganda victory, because he would get precious ammunition to support
his claims that he is the victim of a U.S. plot to oust him. Maduro
repeats this assertion daily, but has not yet shown solid evidence to
support it.

Maduro's strategy - copied from Cuba's - is to "internationalize" the
Venezuelan conflict, so that it is not seen at home and abroad as a
clash between his government and the Venezuelan people, but as a
conflict between a sovereign country and a foreign empire. A U.S.
embargo on Venezuelan oil would help shift the focus to the latter
ground, critics say.

Second, cutting oil imports from Venezuela would not have an immediate
impact on the Venezuelan government, in part because much of Venezuela's
oil exports to the United States have been sold months or years in
advance through the so-called futures market. In addition, Venezuela
could sell the embargoed oil to other countries.

Third, a U.S. oil embargo on Venezuela would not be easy to implement,
because the U.S. government does not buy Venezuelan oil. Private U.S.
companies import oil from Venezuela, just like they do from other
oil-producing countries.

Imposing a partial U.S. embargo on Venezuelan oil imports would expose
U.S. oil companies - mostly Chevron, the biggest U.S. investor in
Venezuela's oil sector - to being nationalized by the Maduro government,
says Jorge Piñon, a Latin American oil industry analyst with the
University of Texas in Austin.

Fourth, even if oil sanctions managed to worsen Venezuela's already dire
economic situation, they could hurt the Venezuelan people even more.
Maduro may simply pass on the costs to Venezuelan consumers and blame
"the U.S. empire," much like Cuba has been doing for the past five
decades, critics say.

So what should the Obama Administration do? Most Latin America watchers
in Washington agree that Obama should continue speaking out against
Venezuela's attacks on democratic freedoms and human rights abuses, as
is his duty under inter-American and United Nations conventions.

In addition, some propose that the Obama administration revoke the U.S.
visas of key Venezuelan officials and their relatives, many of whom are
multi-millionaires with houses in Miami, and vacation in Disneyworld. It
seems like a trivial U.S. response, but it's a very effective one
against embers of the so-called "Bolivarian bourgeoisie," supporters of
these visa restrictions say.

My opinion: Oil embargoes work when much of the international community
supports them, as is the case with Iran. But a unilateral U.S. oil
embargo on Venezuela, even if partial, would give new propaganda
ammunition to the Maduro government, without doing much to help the
pro-democracy cause.

Washington should focus its energies on raising international diplomatic
pressures on the Venezuelan government to free political prisoners and
restore a separation of powers and press freedom in that country. And if
the U.S. Congress decides that that's not enough, it should revoke the
U.S. visas of Venezuelan government and military leaders. But an oil
empargo, partial or total, would play into Maduro's hands.

Source: Andres Oppenheimer: Should U.S. cut Venezuelan oil imports? -
Andres Oppenheimer - MiamiHerald.com -
http://www.miamiherald.com/2014/02/26/3961426/andres-oppenheimer-should-us-cut.html