Chávez Threatens Oil Cutoff in Exxon Spat - WSJ.com

Chávez Threatens Oil Cutoff in Exxon Spat - WSJ.com

As expected, Chavez threatens an embargo, but what I found most interesting about this article is that: "Short-term moves by Venezuela could unsettle oil markets, which have become volatile because of the tight margin between supply and rapidly growing demand. But oil is a global commodity, so the U.S. might also get around Venezuela's embargo relatively easily by getting more oil from other nations. Another country could also buy Venezuelan oil and resell it to the U.S."

Also, keep in mind as the article points out that:"Still, PdVSA relies on its U.S. refining subsidiary, Houston's Citgo Petroleum Corp., to process the country's thick crudes, which can be more difficult and expensive to turn into gasoline and other products. Most analysts say Venezuela's oil would fetch much less from other countries than it gets through Citgo."

However, the article does not mention Venezuela's geographical advantage, which translates into about 30 days compared almost almost 4 months from the M. East. Nevertheless, you cannot expect Chavez to act rationally; so you never know if Chavez is bluffing.