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Last Updated: Monday, 11 February 2008, 11:50 GMT
Venezuela threatens to cut US oil
Hugo Chavez, 2 February 2008
Mr Chavez has threatened before to cut supplies
Venezuelan President Hugo Chavez has threatened to cut off oil supplies to the US unless it halts what he calls its "economic war" against his country.

His warning came days after US oil giant Exxon Mobil won orders in US, UK and Dutch courts to freeze billions of dollars of Venezuelan oil assets.

Exxon wants more compensation from the Chavez government after it took control of Exxon oil projects last year.

The US is the biggest market for Venezuela's heavy crude oil exports.

President Chavez has threatened several times before to stop sending Venezuelan oil to the US but so far not done so.

Nevertheless, his comments during his weekly televised address, took sharp aim at Exxon Mobil and, by extension, the Bush administration.

He described Exxon's management as imperialist bandits who form part of a US government-backed campaign to destabilise Venezuela.

"If you end up freezing [Venezuelan] assets and it harms us, we're going to harm you," Mr Chavez said.

"Do you know how? We aren't going to send oil to the US. Take note, Mr Bush, Mr Danger."

Long dispute

At the heart of the dispute is last year's decision to take over oil projects in the Orinoco Belt, a move Mr Chavez has argued will bring billions of dollars back to the Venezuelan people.

Exxon Mobil refused to sell a majority stake to the Venezuelan government.

It has taken its case for compensation to the International Centre for Settlement of Investment Disputes, a process that could take years.

It has not indicated how much compensation it wants for the 41.7% stake in the Orinoco Belt oil field - worth an estimated $750m (370m).

Last week, the company won temporary court orders in the UK, the Netherlands and the Caribbean freezing Venezuelan assets worth up to $12bn (6bn).

Another order in a New York court froze up to $315m of funds of the state-run Venezuelan oil company, PDVSA.

Further hearings are scheduled later this month in New York and London.

It will be a tough fight, says the BBC's James Ingham in Caracas.

Mr Chavez is a strong leader who rails against what he calls the evils of capitalism while Exxon is renowned as a tough corporate player.

Cutting off oil deliveries to the US would be damaging to Caracas as well as Washington.

The US is not only Venezuela's biggest market but is also home to refineries that specialise in the heavy sour crude oil Venezuela exports.

The threat, then, may be too risky for Mr Chavez to carry out, our correspondent says.

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