Wonder why area gas pump prices shot up about 20 cents a gallon this week? Blame the crisis in Venezuela, where a general strike against leftist president Hugo Chavez has virtually paralyzed the country's once-thriving oil industry.
Venezuela used to be the world's fifth-largest oil exporter, accounting for about 15 percent of U.S. imports, but no more. Oil production is down to 370,000 barrels per day, compared to 3 million barrels before the strike.
Of course it is within U.S. interests to get the strikers to stand down and start the petroleum flowing again. However, the Bush administration is stuck in an ideological bind. It has no love for Chavez, who associates with the likes of Fidel Castro and Saddam Hussein, and it is much more in harmony with the business, labor and bureaucratic coalition that is trying to drive Chavez from power.
Bush doubtless agrees with the opposition's contention that Chavez's policy of elevating the poor at the expense of sound economic principles is destroying Venezuela. At the same time, the administration knows that Chavez was democratically elected, still has the backing of the country's impoverished majority and is perfectly within his constitutional rights to cling to power.
As a result, the U.S. is virtually powerless to help loosen the gridlock that is now hitting American consumers in the pocketbook. Market forces will eventually take hold though, and other oil exporters will fill in the gaps left by Venezuela.
There is much less relief in sight for Venezuela. It is teetering on the edge of a civil war that, apart from the obvious potential tragedy for loss of human life, could leave Venezuela's oil operations permanently degraded, and the country as a whole an economic basket case.
Brainerd Dispatch ©2013. All Rights Reserved.