Venezuela oil trouble continues as diesel prices rise

| Thursday, December 26, 2002

Striking managers at the Venezuelan state oil monopoly will be fired and prosecuted, President Hugo Chavez said Dec. 21 as he vowed to break the work stoppage aimed at forcing him from office, according to press reports.

Chavez also said his oil-rich country may import fuel from neighboring countries to ease shortages.

However, oil prices are likely to remain high after the producers' cartel, OPEC, said it would not release more output into the market until mid-January to compensate for the strikes that have halted production in Venezuela.

The Saudi oil minister, Ali al-Naimi, blamed market "speculation" rather than supply shortages for the current surge in prices that has taken oil above $30 a barrel. But he said OPEC would release more supply on to world markets if the price stayed above the cartel's $22 to $28 target range beyond the middle of next month.

Chavez already has fired four dissident oil executives and seized a fuel-laden ship whose crew joined the strike by dropping anchor in western Venezuela's Lake Maracaibo. Soldiers then moved the tanker Pilin Leon to shore after Friday's seizure. Twelve other tankers remained idle in various ports.

Oil exports have been cut by about 90 percent since the strike began Dec. 2, helping drive up world prices. Chavez foes insist the president must step down before his term ends in 2007, accusing him of failing to revive the economy, widening class divisions and ruling autocratically.

Comments