Support Marketplace

Can Chavez pump up OPEC support?

Logo for OPEC's 141st Extraordinary Meeting in Venezuela

KAI RYSSDAL: The price of crude oil fell almost two bucks in New York today. But it still costs $70.75 to buy a barrel of the stuff. So the mood will probably be upbeat in Caracas, Venezuela, tomorrow. OPEC is meeting there. The cartel will talk about how much oil to pump now that prices seem to have stabilized near record highs. Venezuela's outspoken President Hugo Chavez wants to cut back on production and send those prices even higher. Carol Wise studies Latin American economies at the University of Southern California. Professor Wise, let me ask you first of all, is Chavez going to get what he wants?

CAROL WISE: I don't see it in the cards. Venezuela seems to really be the only one that's cut their production. And everybody else has been holding steady.

RYSSDAL: Well, with oil prices so high, what's his motivation in trying to get this production cut?

WISE: You know, he has a history. Venezuela itself has a history of kind of throwing its weight around in OPEC, even though, if we look at the numbers, it accounts for probably less than 10 percent of overall OPEC production. And, of course, Chavez is an in-your-face kind of leader who, I think, is really using the opportunity of an OPEC meeting in Caracas to kind of stick it in the eye of the United States.

RYSSDAL: Do you think we, the United States, do we sort of marginalize him at our own energy peril?

WISE: I never thought I'd hear myself say this, but I do agree with the Bush strategy and the Washington policy of kind of turning a tin ear to Chavez. He has been looking for a reaction and people have pretty much kept their cool with regard to Chavez and his numerous provocations.

RYSSDAL: I want to ask you about a phrase I read the other day: Resource nationalism. There's a whole lot of that going on now in Latin America with President Chavez and Ecuador and Bolivia nationalizing some of the oil fields there. Do you think that's a rising threat to the United States?

WISE: Well, this isn't really, say, the big nationalizations like 1968 when the Peruvians took over. This is more bickering over prices. We haven't really seen the assets themselves change hands in Bolivia. The government is looking to kind of, you know, really pressure those investors to renegotiate prices up. And my understanding also, from some of those investors, that because prices are so lucrative they'll renegotiate up.

RYSSDAL: I don't want to get too familiar here, but is he sort of, a little bit, kind of the crazy uncle that everybody else is just avoiding?

WISE: I don't think that's too familiar. Yeah. In a way, it's sad. Right now he's the crazy uncle with a big revenue windfall, that is throwing it around. Chavez himself is a donor of aid to his neighbors and to even poor energy consumers in the United States, right? It's almost a bipolar disorder. Prices are down and you're absolutely strapped. So, he's on a roll. He's got a lot of money coming in. But he's actually decreased the production in the hope of pushing the price up. Everyone else, I believe, is either holding steady or producting slightly more. So I think Chavez really is out of step with his colleagues. And I'd be surprised if his colleagues won't be a little anxious to distance themselves from some of the fiery rhetoric. They've got enough problems in terms of their own relations with the United States.

RYSSDAL: Carol Wise is professor of international relations at the University of Southern California. Professor Wise, thanks a lot for your time.

WISE: Thank you.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...