President Hugo Chavez on Sunday threatened to cut off oil sales to the United States if Exxon Mobil Corp. wins court judgments to seize billions of dollars in Venezuelan assets.
John Robb says “might be an interesting test of the fungibility of oil…” I’d say oil is quite fungible, which means any oil is about the same as any other oil. So if Chavez refuses to sell oil to the US, the US can buy it elsewhere, including buying the oil that Venezuela sold to someone else. Because Venezuela would have to sell that oil elsewhere, as oil is the primary driver of their economy. But could they sell it at the same price or would buyers demand a lower price knowing Venezuela was flooded with supply?
It appears that Venezuela accounts for about 15% of US imported crude oil and petroleum. So, which country would be hurt more by a shut down of sales?