Chavez's Stature Shrinks as Price of Oil Plummets

Venezuela's largesse depends on high volume, expense
By Kevin Spak,  Newser Staff
Posted Oct 20, 2008 11:49 AM CDT
In this Nov. 30, 2006 file photo, oil drills are seen in Maracaibo Lake in Venezuela's oil rich Zulia state.   (AP Photo/Leslie Mazoch, file)
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(Newser) – Hugo Chavez’s days as an international sugar daddy may be ending, at least for now. Chavez has made a habit of lavishing gifts on his political allies, but with crude around $70—less than half its peak price—he may not have the wealth to spread, the Christian Science Monitor reports. Oil makes up 90% of Venezuela’s export earnings and more than half its budget.

Venezuela sends 300,000 barrels of subsidized oil a day to needy neighbors, and hundreds of thousands more to Cuba, Nicaragua, and even the US. In addition, Chavez has poured billions into social “missions,” which will likely be the last cuts he makes. “Investments in countries like Ecuador and Nicaragua, or helping the Bolivian oil company, it's likely you won't see those move forward,” said one analyst.