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EDITIONS
 Tuesday, 17 December, 2002, 14:43 GMT
Venezuela crisis 'may affect war plans'
Venezuelan flag and oil tanker
Strikes have severely disrupted Venezuelan oil supplies

The continuing strike in the Venezuelan oil industry could have an impact on preparations for a US war in Iraq.

Humberto Calderon Berti, a former Energy Minster and senior official of Venezuela's state oil firm, has said he does not think the US will make a decision to proceed until the crisis in his country is resolved.

Venezuela accounts for about 13% of US oil imports - and foreign supplies are about half of the US' total needs.

Venezuela's oil industry has been severely affected by a political strike.

Oil refinery managers and oil tanker captains have joining a strike led by right-wing business groups, and more than 40 oil tankers are reportedly anchored off Venezuelan ports waiting to take on oil shipments.

Looking further afield

Venezuela is the world's fifth largest oil exporter.

So the loss of Venezuelan supplies would be disruptive at the best of times.

The main alternative source is the Middle East, which has two major drawbacks.

Shipping oil from the Gulf to the US takes much longer, up to 60 days altogether.

And in any case, a war in the region could disrupt supplies from the Gulf as well.

Iraq's relatively modest current supplies would be likely to stop altogether.

Stock building

Other countries too could be affected especially if their oil installations were attacked by Iraqi missiles.

The combined impact of the war risk and the strike in Venezuela has pushed the price of crude oil higher.

Some grades of oil have been trading in New York at more than $30 a barrel.

And it is likely that if and when the conflict begins, oil prices will rise further still.

The US does have a large strategic reserve it can draw on and has recently been adding to it as an insurance against war-related disruptions.

The US administration could almost certainly go to war at a time when both Venezuela and Middle Eastern supplies were unreliable.

But it would surely prefer not to.


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See also:

16 Dec 02 | Business
16 Dec 02 | Americas
06 Dec 02 | Business
16 Dec 02 | Middle East
12 Dec 02 | Business
Links to more Business stories are at the foot of the page.


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