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Latest update : 2008-02-11

President Hugo Chavez has threatened to cut off oil supplies to the United States unless it halts an "economic war" that he said included an Exxon Mobil lawsuit freezing $12 billion in Venezuelan assets.

CARACAS - President Hugo Chavez on Sunday threatened
to stop sending oil to the United States unless it halted
an "economic war" that he said included an Exxon Mobil
lawsuit freezing $12 billion in Venezuelan assets.

The anti-American leader of a major crude exporter to the
United States also warned that such U.S. aggression could cause
world oil prices to spike to $200 a barrel.

Oil prices rose this week in part because of the
self-styled socialist revolutionary's dispute with the largest
U.S. company over compensation for Chavez's nationalization
last year of an Exxon Mobil Corp project.

The administration of President George W. Bush has
distanced itself from the Exxon legal offensive, in which the
oil company won international court orders freezing assets of
the state oil company PDVSA.

"If you freeze us, if you really manage to freeze us, if
you damage us, then we will hurt you. Do you know how? We are
not going to send oil to the United States, Mr. Bush, Mr.
Danger," Chavez said on his weekly TV show.

"Venezuela will join in your economic war and other
countries will be with us in the economic war," added the ally
of oil producers such as Iran and Ecuador.

Chavez has frequently issued conditional threats to stop
shipments to its biggest oil customer, but has maintained
supplies despite clashing with Washington over everything from
crude prices to free trade to democracy.

"Never again will they rob us -- the Exxon Mobil bandits.
They are imperial, American bandits, white-collared thieves.
They turn governments corrupt, they oust governments. They
supported the invasion of Iraq," he said.

Exxon retaliated for the seizure of a heavy crude upgrading
project, winning the first big court battle over compensation
in a wave of takeovers that Chavez says will help create a
socialist state.

The court rulings in several countries mean the state oil
company -- Chavez's main income source -- cannot sell certain
assets or move some funds while the compensation case is


Exxon's move is the boldest challenge yet by an oil major
against any of the governments from Russia to Ecuador that have
moved to increase their control over natural resources as
energy and commodity prices have soared.

Industry analysts believe other companies could follow
Exxon's lead if it prevails in a court battle that could take
several years.

Chavez, who calls capitalism an evil, accuses big oil
companies and large consumer nations of seeking to control the
natural resources of major producers such as Venezuela.

His comments on Sunday followed days of a blitz on state
television of programs and advertisements denouncing Exxon as a
predator company seeking to plunder Venezuela.

The court orders were a new blow to Chavez, who lost a
referendum on expanding his powers and enshrining socialism as
a state goal in December and has struggled for months to combat
rampant inflation and chronic food shortages.

Date created : 2008-02-11