Energy Wars | Chavez Sells China $5 a Barrel Oil, Venezula Charges US Nearly 6 Times the Amount

U.S. documents: Chavez selling China cheap oil

Chron.com

Comrades in Arms? This chummy exchange between Obama and Chavez makes one wonder why the US is being price gouged by Venezuela.

President Hugo Chavez’s government sold China oil for as little as $5 a barrel and was upset that China apparently profited by selling fuel to other countries, according to a classified U.S. document released by WikiLeaks.

The report about Chinese companies diverting oil was one of several newly released documents that also describe falling crude output in Venezuela caused by a host of problems within the national oil company, PDVSA. The document said Chavez’s government was “extremely upset with Chinese companies.”

The documents, posted online by the Spanish newspaper El Pais, also showed that U.S. officials have managed to cultivate sources within the state oil company in spite of Chavez’s antagonism toward Washington.

The confidential memo from the U.S. Embassy in Caracas on Feb. 26 said a PDVSA director revealed that the state company “had analyzed its crude sales to China and determined that China had only paid $5 barrel of crude on a couple of deals” — a small fraction of the market price.

The document said that according to the official, Chavez’s government was “extremely upset with Chinese companies due to the discrepancy between Chinese petroleum import statistics that suggest (China) is profiting from Venezuelan oil purchases by diverting the crude to third markets and earning a sizable margin.”