Venezuela Threatens to Stop U.S. Oil Exports

Venezuelan President Hugo Chavez has threatened to cut off oil exports to the U.S., in the latest development in the Exxon-Mobil case. Venezuela supplies about 12% of U.S. oil, making it the fourth-largest supplier.

Exxon's high-profile fight to keep its investment in Venezuela, which is nationalizing its oil resources, highlights the size and power of the world's biggest company.

"Last year, (Venezuela President Hugo Chavez) declared oil sovereignty by taking a majority stake in projects in the Orinoco River Basin, which may hold the world's largest deposits of heavy crude," the Christian Science Monitor wrote, summarizing the situation. "Of the six companies operating there, all agreed to new contracts except for Conoco-Phillips and Exxon."

Exxon won a case last week that froze $12 billion in Venezuelan assets. Now the battle will be played out in international courts over the course of years.

Venezuela, which has been butting heads with Washington for years, ranks in the world's top 40 economies. If Exxon was a nation and not a corporation, it would rank farther down the list, someplace around No. 65, but its record profits in 2007 – $40.6 billion – exceeds that of about two-thirds of the gross domestic products ranked by the World Bank.

So while these two adversaries aren't equal, in a legal sense nor in money, it is nonetheless a battle of titans. The battle is between entities on the far end of a political spectrum – one a leftist nationalist government and one the greatest product yet of capitalistic money making.

So who should have access to the oil, and the wealth it promises? To whom does it belong?

Imagine if this battle was taking place in a nation that didn't have such a reserve of bile when it comes to U.S. relations.

As the world supply of oil dwindles, or becomes more expensive, expect this question to take on more urgency. Hopefully, it won't be fought outside the courts.

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