Chavez Stokes Confrontation Over U.S. Role in Venezuela

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By Monte Reel
Washington Post Foreign Service
Tuesday, July 19, 2005

CARACAS, Venezuela -- After the rumble of tanks died down and the last soldier high-stepped past the spectators' pavilion, President Hugo Chavez told the thousands attending Venezuela's Independence Day parade July 5 that no invading army could match the fighting force that had just marched by, "armed to the teeth."

The hypothetical invasion he invoked was patently clear: Two days before, Chavez had announced the discovery of evidence that the United States had drawn up blueprints to invade Venezuela, a plan he said was code-named "Operation Balboa."

American officials dismissed the claim as fiction, just as they have denied Chavez's repeated assertions that the CIA is trying to assassinate him, or that the Bush administration was behind the military coup that briefly toppled his government in April 2002.

There is little doubt, however, that relations between Venezuela and the United States, strained for years, are plunging to new lows.

Chavez has always been outspoken in condemning what he calls "U.S. imperialism," mocking President Bush as "Mr. Danger" and Defense Secretary Donald H. Rumsfeld as "Mr. War." But Venezuelan officials insist that his recent threats to sever ties with Washington -- thereby suspending the export of 1.5 million barrels of oil per day -- are more than the rhetoric of a populist rallying domestic support.

"When the president talks, it is not a joke," said Mary Pili Hernandez, a senior Foreign Ministry official. "The only country Venezuela has bad relations with is the United States; with all other countries we have good or very good relations. But with just one word, the U.S. could resolve all of the problems. That word is 'respect.' "

Chavez asserts that the 21st-century equivalent of the Cold War is the developed world's thirst for oil -- and its attempts to manipulate weaker governments to secure it. Oil-rich Venezuela sells 60 to 65 percent of its crude oil to the United States, making it the fourth-largest oil supplier to the U.S. market. This year, near-record-high oil prices have helped Chavez finance a variety of social programs that he vows will make the country more independent of U.S. influence.

Observers say the oil revenue also has emboldened Chavez's foreign policy strategy. He has recently inked oil agreements with Argentina, Brazil and his Caribbean neighbors and has launched efforts to strengthen ties with China through oil accords.

Rafael Quiroz, an oil industry analyst in Caracas, said the Chavez government believes that the conflict between developing countries endowed with such natural resources and nations with high demands will only intensify in coming years. Chavez would like to precipitate that conflict, Quiroz said.

"I think he's correct to try to speed up that kind of confrontation, because the developing world -- where 85 percent of world reserves are -- will stand in a better place after that," Quiroz said. "Every day it is more apparent that oil is fundamental for Venezuela in its international relations, and it is the main ingredient Chavez uses to form strategic alliances."

Venezuela could find other buyers for oil and the United States could find other suppliers, but both have sound financial incentives to continue the current trade arrangement. If Venezuela cut supplies, the United States would probably have to pay more to fill the gap, driving up domestic fuel prices.

Venezuela would also suffer because of higher shipping and infrastructure costs, according to U.S. officials. There are now five refineries in the United States specifically tooled to process Venezuela's variety of heavy crude oil; no other countries are similarly equipped, officials said.

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