The Other Oil Problem

6 January 2003


Venezuelan Strike Threatens Iraqi War

George W. Bush was an oil man, a failed one, but an oil man, nonetheless. So, he might just be paying some attention to the month-long general strike in Venezuela, a country that provides 13% of America's oil. With no oil moving out of Caracas, he may have to decide between Saddam and gas at $3 per gallon. Of course, if he hadn't rashly recognized leaders of a coup that toppled Chavez for less than 48 hours back in April, Mr. Bush might have some influence over the situation.

Mr. Chavez is, of course, the sort of foreign leader the Bush administration hates. He was the first foreign head of state to visit Iraq after the Gulf War in 2000. He likes Fidel Castro's politics. He has condemned church leaders for "not walking the path of Christ." Worst, he attacked Mr. Bush for "fighting terror with terror" in Afghanistan.

However, the US needs the oil. This strike has caused a drop in America's reserves of 9 million barrels of oil, not the sort of trend one wants in advance of a war against Iraq. But it is not debilitating enough to prevent the war. Rather, there will be a price squeeze until the First Infantry Division marches through Baghdad.

Qui bono? is the irritating Latin question. The beneficiaries of this price squeeze are, surprise, the oil companies. Slipping an extra dollar of profit into a $40 or $50 barrel of Saudi crude is easier than when the price is just $10. And getting Congress to allow more drilling in Alaska becomes easier.

Imagine that, saving Alaskan wildlife by solving the political and economic problems in Venezuela.