Chavez sees oil at $100 a barrel if US hits Iran

[lovuian]

LONDON (Reuters) - Venezuelan President Hugo Chavez said on Sunday that if the United States attacked Iran in its dispute with Tehran over nuclear technology, the price of oil could soar to triple figures.

Visiting London following an EU-Latin American summit in Vienna at the weekend, Chavez, leader of the world's fifth largest oil exporter, said the Iranians would have no choice but to respond to a U.S. assault by cutting oil production.

"If the United States attacks Iran ... oil could reach $100 a barrel or more," Chavez told a meeting hosted by London's left-wing mayor Ken Livingstone. "The English middle classes would have to stop using their cars."
http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-05-14T193049Z_01_L1440203_RTRIDST_0_BUSINESSPRO-VENEZUELA-BRITAIN-DC.XML
more...
OUCH!!!

[SlipperySlope]

1. If England simply dropped the petrol tax to zero

Then the middle class would have no problem fueling their cars.

The power to make gas affordable is completely in the hands of the State.

[Amonester]

2. Two questions, if I may (I don't have time to search for now).

1. Which services (apart from enriching the Queen's clan) do these taxes pay for?
2. If the tax would be cut, what (or who) would pay for the services these taxes pay for?

Thank you.

[SlipperySlope]

It doesn't pay for any specific services.

The fuel duty in the UK does not pay for any specific services. The revenue raised simply goes into the general fund.

Therefore, when the fuel duty is cut, it is a political decision to decide whether to cut services or seek the funds elsewhere.

Quite simply, the State directly controls a large component of the price of petrol through the fuel duty and VAT. It is completely within the State's power to reduce the burden on citizens by eliminating these taxes. Any pain felt by fuel consumers is the result of the State's unwillingness to take action.

Further notes:
1: The UK has extremely high fuel duties, even by European standards.
2: This tax is effectively regressive, hurting the lower classes more than the upper classes. (I doubt the Queen struggles to afford filling her tank).
3: This tax is particularly burdensome on the rural population of England, who do not have access to effective public transportation and for whom driving is a necessity of life.

In the USA, at least on paper, fuel taxes go to pay for road services. This establishes some sort of link between the people using the service and the people paying for it. This is not the case in the UK. Instead, since the revenue raised from petrol goes into the general fund, it is much harder to argue that this is a fair "use tax".

[Amonester]

6. Similar situation in Canada.

And many roads are even in worst shape due to big flaws in their original conception and construction (depending on the provinces), but mostly due to the extreme climate changes. Good points. Thanks.

[SlipperySlope]

13. The same is true in the UK

Road conditions in some areas have deteriorated, and there is some anger that the fuel duty isn't being used to repair them.

I'll point out that any attempt to lower the fuel duty is usually met with opposition by environmental groups. A clear motivation of backers of the high fuel duty is to DISCOURAGE driving. In other words, if fuel becomes too expensive for the average citizen, and they stop driving as a result, backers of the fuel duty will see this as a good thing.

Contrast this with the US, where (in theory) discouraging driving isn't a goal of fuel taxes, but merely to pay for the road infrastructure.

[robbibaba]

3. Perhaps the expense of fielding soldiers in Iraq?

Bring the boys back home!

[Amonester]

7. Roger that.

Bring the boys and the girls back home! :thumbsup:

[cliss]

4. When Hugo Chavez speaks,

the world listens. I notice, they're not really saying too many hostile things about him lately. Could it be he's got a little more power these days?

Eh George? I'd say the world is starting to sit up and take notice.

The power is shifting to the countries which have oil resources, and away from the end users.

[SlipperySlope]

5. You do know that the US is the #3 oil producer?

The US ranks third among oil-producing nations. Venezuela ranks eighth.

The importance then isn't how much you produce, it is how much you can export.

But being a net exporter tends to mean that you have a weaker domestic economy. That's the conundrum. Oil gives the government of weaker countries more power. An odd situation.

[Solon]

8. That doesn't make sense...

Venezuela has more that twice the proven reserves of the United States, which has suffered declining production since the 1970s, so I don't see how you can say that would be accurate. Venezuela does provide a third of our oil, give or take, I doubt the United States could even export that much.

Look here:

http://en.wikipedia.org/wiki/Oil_reserves

[SlipperySlope]

14. Follow-up

I reread my post and I admit it was written poorly.

The US is the third largest producer of oil. I was not including reserves or exports in my point.

Here are some recent oil production rankings:

http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html

[rman]

15. 1: Russia - 2: Venezuela - 3: USA

http://en.wikipedia.org/wiki/Petroleum
see image "Oil exports by country"

Where did you get your numbers?

[SlipperySlope]

16. Produced != Exported

My numbers are production, not exports:

http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html

[Robbien]

9. I wish this headline could be repeated over and over

It needs to sink into the public's little heads that there will be a serious hit to their pocketbooks if they keep supporting BushCo's push to drop bombs on Iran.

[corporate_mike]

10. Another attempt by Chavez to drive oil prices higher

He seems to make an alarming statement every week now.

[meow2u3]

11. WRONG! It's OBL working behind the scenes with Bushco

working on $100/barrel of oil! $100/barrel is exactly what Osama bin Laden and Al-Qaeda want!

Whose bidding is Bushco doing? Certainly not that of the American people, but that of the terrorists!

[Phx_Dem]

12. Yea, He's quite the capitalist.......nt