With a slowing economy, rising inflation, the 'S' word, 'stagflation' is being bandied about. Now comes Hugo Chavez and threatens to cut off oil shipments to ExxonMobil in retaliation for Exxon's $12 billion court ordered freeze of Venezuelan assets for alleged breach of contract, and confiscatory actions against Exxon in Venezuela.
The imbroglio between Venezuela and Exxon (since last week Venezuela has actually begun cutting oil shipments to Exxon) is said to have helped oil prices bounce back from a low this year of $86.11/ barrel to near $96 today, a rise of over 10%, or in dollar terms a transfer of over $200 million a day from American consumers to oil interests around the world.
Now a question all Americans should be asking: "Where is our Department of Energy, where is the White House announcing that our Strategic Petroleum Reserve (currently holding some 700 million barrels of oil, bought and paid for out of our Treasury) is available and at the ready to make up for any of Hugo's extortionary tactics?"
One now has the feeling that the Strategic Petroleum Reserve has been created as a boondoggle for the oil industry exclusively, whereby purchases for the Reserve help escalate prices as they are made. Yet releases from the Reserve that would help stabilize prices or even push prices down are anathema.
If the Venezuelan governments actions are not reason enough for our government to proclaim loudly and clearly that the STP is at the ready to iron out any supply discrepancies, then when, if ever.
It is high time Congress looked into this matter as the management of the SPR under this administration defies comprehension and raises the worst suspicions.