Venezuela Strike Stalls Oil Exports,
Propelling Market Prices Higher
By MARC LIFSHER
Staff Reporter of THE WALL STREET JOURNAL
CARACAS, Venezuela -- Oil exports to the U.S. remained largely
stalled at major ports in this South American country during a
second day of widespread protests against the government of leftist
President Hugo Chavez.
The strife has rattled oil markets that already are contending with
production cutbacks over the past year or so from the
Organization of Petroleum Exporting Countries and this week's
announcement that Iraq had halted its oil exports for 30 days.
The price of the U.S. benchmark crude oil,
which has risen sharply in recent weeks,
closed up 31 cents to $26.13 a barrel on
Wednesday on jitters that Venezuela's
problems could lead to tighter supply.
However, new data from the Paris-based
International Energy Agency indicate that
the former Soviet Union continues to
increase its exports, and other oil
producers have indicated they may be
willing to fill any shortfall.
The IEA said that in March OPEC
increased its production by 440,000 barrels a day, while
non-OPEC countries -- Norway, in particular -- slashed output, as
they had promised they would. Russia, however, which also
promised export reductions to bolster then sagging oil prices,
increased production to 7.1 million barrels a day in March, a
record for the post-Soviet era, the IEA data showed.
The amount of crude and oil products that was exported last month
by the former Soviet Union, of which Russia is the largest exporter,
rose to a record 5.24 million barrels a day in March from 5.08
million barrels a day in February.
On Wednesday,
Norway said it would
consider increasing its
output if prices remain
high. Saudi Arabia has
done that in the past,
as well, and Russia,
too, may be eager to
take advantage of
demand and higher
prices.
Amid the
demonstrations in
Venezuela, which is an
OPEC member and
the world's
fourth-largest oil exporter, the state oil company, Petroleos de
Venezuela SA, conceded it has been operating under "force
majeure," a legal term meaning it cannot guarantee delivery to its
customers of all contracted shipments. "Shipments will be delayed,
and the situation obviously isn't normal," said Jorge Kamkoff, vice
president of the oil giant, known as PDVSA. He claimed,
however, that the force majeure has more to do with Venezuela's declining OPEC production quota
than strike-related troubles.
The unrest is part of a general strike called by the one million-member Venezuelan Workers
Confederation and the powerful national chamber of commerce, called Fedecamaras, and which late
on Wednesday was prolonged indefinitely.
Mr. Chavez, a former paratroop colonel, denounced the work stoppage as "subversion" and a
"conspiracy" of the rich and powerful to drive him from power and instigate a military coup.
Venezuela normally ships about 1.7 million barrels a day of crude oil and refined products like
gasoline. But the backlog of more than a dozen tankers anchored offshore is starting to affect oil field
production, observers in the oil region said.
PDVSA's recently fired president, retired Brig. Gen. Guaicaipuro Lameda, told reporters Tuesday
night that crude production dropped 450,000 barrels a day over the previous three days.
Meanwhile, the country's biggest refinery, the 950,000-barrels-per-day Paraguana complex, is
running at below 50% of capacity, and the smaller 130,000-barrels-per-day El Palito refinery is
expected to remain completely shut down through the end of the week, oil analysts said.
Mr. Chavez contends that the government oil company is operating at 100%. OPEC Secretary
General Ali Rodriguez, a former Venezuelan oil minister and confidant of the president, characterized
PDVSA production as normal.
Oil executives and consultants said there were outbreaks of violence between striking petroleum
workers and backers of Mr. Chavez. Oil union officials claimed that 95% of their members stayed
away from the job in oil fields and refineries on Wednesday. The government called that figure
baseless.
Pedro Carmona, the petrochemicals executive who heads the business chamber, declared the strike
indefinite because of the government's failure to "send a strong signal of its desire to solve the crisis."
The strike's co-leader, President Carlos Ortega of the Venezuelan Workers Confederation, stressed
that his members plan to continue the strike even if Mr. Chavez should use his special constitutional
powers to declare a state of emergency.
Write to Marc Lifsher at marc.lifsher@wsj.com |
