Oil colonialism

Published : Jul 01, 2011 00:00 IST

An anti-U.S. demonstrationin Caracas on May 29. The Venezuelan government has condemned the U.S. sanctions against the state oil company PDVSA. - ARIANA CUBILLOS/AP

An anti-U.S. demonstrationin Caracas on May 29. The Venezuelan government has condemned the U.S. sanctions against the state oil company PDVSA. - ARIANA CUBILLOS/AP

Cooperating with Iran's energy industry is not the sole reason for the U.S. decision to impose sanctions on Venezuela's state oil company.

VENEZUELA has become the latest country to be put under economic sanctions by the United States for doing business with Iran. In the last week of May, the Barack Obama administration announced that it was imposing sanctions on Venezuela's state oil company Petrleos de Venezuela, S.A. (PDVSA) for cooperating with Iran's energy industry. The U.S. State Department spokesman said dealings with Iran's oil industry violated the Iran Sanctions Act enacted by the U.S. Congress way back in 1996. We are sending a clear message to companies around the world. Those who continue to irresponsibly support Iran's energy sector or help facilitate Iran's efforts to evade U.S. sanctions will face significant consequences, said the U.S. Deputy Secretary of State, James Steinberg.

The Iran Sanctions Act, which goes much beyond the sanctions mandated by the United Nations Security Council on Iran, is similar to the Helms-Burton Act, which penalises countries trading with Cuba. In 2010, President Obama further toughened the Iran Sanctions Act, penalising firms that supplied refined gasoline to Iran. Although Iran exports huge amounts of crude, it faces a gasoline crunch owing to the sanctions imposed by the West on the country since the Islamic Revolution of 1979. Refineries that were due for upgradation decades ago are in a decrepit state because of the inability to access essential spare parts and machinery.

Since the beginning of the last decade, Washington has been trying to pressure Iran's leading trading partners, including India, to cut off their economic links with Iran. Its efforts have met with varying degrees of success. In the case of India, the U.S. has been partially successful as leading Indian private companies such as Reliance Petrochemicals, which supplied gasoline to Iran, have cut down their business dealings with the Islamic country fearing reprisals from Washington. President George W. Bush's Secretary of State Condoleezza Rice had publicly warned the Indian government to desist from signing big-ticket deals such as the Iran-Pakistan-India (IPI) gas pipeline deal.

As the West mounts pressure on Teheran to scrap its peaceful nuclear programme, visiting American officials and heads of think tanks have been harping on the need for India to distance itself from Iran. Otherwise, they warned, the existing close U.S.-India strategic relationship would be adversely impacted. Similar pressures were put on Islamabad too, but despite the greater leverage Washington had over it, the Pakistan government went ahead with the gas pipeline deal. Both the Iranian and Pakistani governments have said that the option to join in the IPI pipeline project is still open to India.

Obama's real face

Venezuela, unlike the two South Asian countries, is not amenable to U.S. pressure. Under President Hugo Chavez, the Venezuelan government has been following a fiercely independent foreign policy that has enraged Washington.

Venezuela, along with a core group of Latin American and Caribbean countries, has resolutely opposed the hegemonic policies of the U.S. in the region and in the world. Chavez was among the first heads of state to condemn the U.S.-led North Atlantic Treaty Organisation war on Libya. Chavez, like many world leaders, had initially expressed his admiration for Obama and had expected that the new President, with his emphasis on projecting soft power, would be different from his predecessor Bush. But three years into the presidency, Obama has shown his real face to the world. He has launched another war, in Libya, adding to the wars he has inherited in Afghanistan and Iraq.

In the case of Venezuela, Obama has taken a step that even Bush Jr had second thoughts about. Of course, Bush was no friend of Chavez. During his presidency, Chavez was briefly ousted from power in a military coup sponsored by the U.S. Central Intelligence Agency (CIA) in 2002. But no economic sanctions were imposed on Venezuela for its strong economic ties with Iran.

In fact, U.S. Secretary of State Hillary Clinton had stated a couple of months ago that there was no evidence to show that Venezuela was violating U.S. laws by having diplomatic and commercial dealings with Iran. But Obama, facing re-election next year, has been pandering to the American right wing, especially the Jewish lobby, which would like the U.S. to declare another war, this time against Iran. Sanctions against the Fatherland of Bolivia! Imposed by the Gringo imperialist? Well, Welcome Mr. Obama, don't forget that we are the children of Bolivar, Chavez said on his Twitter account. Simon Bolivar, the 19th century liberator of Latin America from Spanish colonialism, is the icon of the Venezuelan revolution.

The presidential election in Venezuela is scheduled for next year, and this could be another reason for Washington's heightened interest in targeting the revolutionary government. The Obama administration has been funding the right-wing opposition in Venezuela. Since Obama took over, $40 million has been channelled to the opposition parties and media conglomerates in Venezuela. Obama's 2012 Budget specifically allots an additional $5 million in aid to Venezuelan civil society, a code word for the rabid right-wing groups and the influential media outlets they control.

The Obama administration has other reasons to be unhappy with the developments in the region. Owing to the initiatives of Chavez and the many like-minded leaders who have since risen to power, regional integration has received a fillip. Trade ties between the countries of the region have increased tremendously and are slowly but surely replacing the traditional economic links with the U.S. Most Latin American countries are cold to the idea of a free trade pact with the U.S. China, Russia and even Iran have started doing business in a big way in Latin America, once the exclusive preserve of the American empire.

Even close allies of the U.S. such as Colombia have started distancing themselves from Washington. After the election of Juan Manuel Santos as the President of Colombia last year, relations with Venezuela, its immediate neighbour, have dramatically improved. Bogota, which under the previous President, Alviro Uribe, blindly looked to Washington for guidance, now seems to have opted for friendship with Caracas.

Santos and Chavez played a key role in facilitating the return of former Honduran President Manuel Zelaya to his country in the last week of May. Zelaya was ousted from the presidency in a military coup in 2009. Under the agreement, the Honduran government agreed to allow Zelaya to function freely and participate in the politics of the country. As a quid pro quo, Honduras was readmitted into the Organisation of American States (OAS) from which it had been suspended in 2009. The majority in the international community had refused to recognise the legitimacy of the Honduran government after the coup. The Colombian President publicly praised Chavez for his role in bringing about national reconciliation in Honduras.

Gross interference

Under the recently imposed sanctions, the PDVSA, which is a significant contributor to the oil-driven Venezuelan economy, is barred from competing for U.S. government contracts and prohibited from seeking access to the U.S. Export-Import Bank. However, the sanctions do not affect the PDVSA subsidiary CITGO, which owns oil refineries and gas stations in the U.S. CITGO supplies 1.4 million barrels of oil a day to the U.S., which amounts to 10 per cent of its annual oil imports. The U.S. economy is heavily dependent on Venezuelan crude. Despite the ups and downs in the bilateral relationship since the late 1990s, the oil trade between the two countries has never been affected so far.

But Chavez has warned that if push comes to shove, he will retaliate by cutting off Venezuelan oil supply to the American market. Washington and Caracas are currently engaged in a diplomatic tug of war on Obama's choice of ambassador to Venezuela. The Venezuelan government has refused to receive Larry Palmer as the U.S. envoy because of his stated views on Venezuela. In remarks to the U.S. Senate Foreign Relations Committee last July, Palmer said that Venezuela was supporting leftist rebels in Colombia and that the country posed a danger to the U.S.' national interests.

Sparing CITGO while imposing sanctions on the parent company has in no way appeased the Venezuelan government. Senior government officials, including Petroleum Minister Rafael Ramirez, have described the U.S. action as a gross interference in the domestic affairs of the country and a violation of its sovereignty. In the last week of May, PDVSA workers along with other Venezuelans staged two massive demonstrations in Caracas to protest against Washington's latest provocations.

The PDVSA is no ordinary state institution. It is directly involved in the running of hospitals and schools in the country's poor neighbourhoods. PDVSA has used its profits to fund social programmes. Ramirez, in his speech at a protest march on May 29, said that the PDVSA symbolised universal health care, free education and food cooperatives. Venezuela's oil, he said, brings justice to our people.

Ramirez said that the real motive of the U.S. in targeting PDVSA was to monopolise the world's oil supply. He said that it was not an accident that Libya was singled out among Arab countries for invasion. He pointed out that Libya was the biggest oil producer in Africa. He said that the real motive of the U.S. in singling out Iran as well was oil. The nuclear issue was only a pretext, Ramirez emphasised.

Iraq too, the Minister added, was invaded for its oil. Member states of the regional grouping the Bolivarian Alliance for the Peoples of America (ALBA) expressed their indignation at and rejection of the U.S. government's actions against Venezuela. The eight-member grouping, which includes Cuba, Nicaragua, Ecuador and Bolivia, called for a definitive end to the U.S. acts of aggression against Venezuela.

The Ecuadorian government, in a statement, described the U.S. government's decision as a violation of international law. Chilean legislators said the U.S. action was an aggression not only against Venezuela but against all Latin American countries. They said that the U.S. policy towards Venezuela and other member-nations of the Organisation of the Petroleum Exporting Countries (OPEC), such as Iraq, Libya and Iran, has only one name, one objective, one common denominator oil.

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