Venezuela Crisis Deepens, Oil Prices Soar

December 16, 2002

As the politically induced strikes continue to sweep Venezuela, oil prices jumped to a two month high, reflecting the lack of output from the world's fifth largest oil exporter. International benchmark Brent soared 86 cents to $28.07 a barrel by early afternoon in London, its highest level since October 17. U.S. crude futures jumped 64 cents to $29.08. The strikes have been spurred by a serious division among the Venezuelan people, half who are trying to force controversial president Hugo Chavez to resign, and half who staunchly support the embattled leader. Crude oil has risen by 20 percent in the past month because of the Venezuelan stoppage and the threat of a U.S. attack on Iraq. On Sunday, Venezuelan army commandos reportedly took control of an oil tanker and arrested its striking crew. Wire reports indicate that a pair of oil tankers loaded over the weekend, but more than 40 were waiting at anchor off Venezuelan export terminals.

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