Hugo Chavez and Venezuela

The President of Venezuela, Hugo Chavez, has been called, a dictator, a tyrant and a despot. He has openly opposed the United States, a measure few world leaders would ever risk. He has been labeled a threat to hemispherical security by the Bush Administration and a threat to world peace. Before Chavez, the Venezuelan military had long-lasting ties with the United States Military, under Chavez’s direction all ties were severed. Hugo Chavez realized early on that his nation's abundant supply of oil was the key to power, wealth and international respect. Using petroleum as a geopolitical weapon he has forged alliances, negotiated treaties and fueled his Bolivarian revolution.

Before Chavez intervened, Venezuela’s oil profusion would have seemingly stimulated the nation’s slumping economy, but the oil money was not reaching the people. A few businessmen were reaping the rewards of an oil deal that favored the United Stated. In a public effort to correct this state of affairs, Chavez fired Luis Guisti, head of the PdDSA, along with two thirds of his employees, bringing the corporation under complete government control. Chavez opposed the North American Free Trade Agreement (NAFTA) that helped to keep oil prices low for the United States, Mexico and Canada. Chavez protested the low price successfully lobbying OPEC to raise the price of oil. When Chavez first lobbied to raise the price of oil, it was close to ten dollars a barrel. Recently oil has reached a record high topping out at one hundred and ten dollars a barrel. In addition to the raising the price of oil Chavez has strategically diversified the Venezuelan oil market, selling oil to China, the world’s second largest energy consumer after the United States, as well as courting India and several other Asian Countries. However, Venezuela currently sells sixty percent of its oil to the United States.

As part of his diversification strategy, Chavez offers his oil at a discounted rate to nations that he can...