Even as Venezuelan President Hugo Chavez threatens to take over oilfields run by ExxonMobil, Chevron, BP and Shell, he’s using his oil money to undermine the International Monetary Fund, reports Bloomberg.
And while the U.S. oil giants are nearly silent in public they are seeking negotiations with the Latin American strongman to keep operational control of their Orinoco oilfields, which Chavez has ordered under state control as of May 1.
What’s the equation here? Oil companies’ desperation will bolster Chavez’ power, at the time Chavez is handing out billions of Venezuela’s oil wealth to other Latin American nations in an explicit effort to supplant the International Monetary Fund. That damages the U.S. and IMF goals of encouraging open markets and free trade. The IMF is also suffering monetarily from a lack of new markets for its loans, as old loans are paid off by newly prospering nations in Asia.
The oil majors have lashed themselves to despots including Chavez and are eyeing deals with Iran. The Bush administration has not publicly discouraged oil companies from thus indenturing themselves, but the new Congress is raising questions.
No wonder Chevron ads obviously aimed at lawmakers are urging that energy be seen as a global matter, not something to be meddled with by U.S. trade restrictions. So what if free trade by oil helps kill off the chief vehicle for encouraging free trade in emerging nations?