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Oil prices will stay at a record high level, especially since
Oil prices will stay at a record high level, especially since the United States is involved in permanent conflicts with major oil exporters. This week, oil prices have gone up again by Chavez's surcharge - $3.5 per barrel.

A couple of weeks ago, oil prices went down to a comfortable $86 per barrel, but now they have again jumped to $93-$94 per barrel. Oil traders explain an increase of $3-$4 by Chavez's surcharge - a result of legal battles between the American oil giant Exxon Mobil and Venezuelan state-run oil company Petroleos de Venezuela SA (PDVSA).

In the last two years, the Venezuelan government has been nationalizing the oil and gas sector. This is the primary cause of the conflict. It has tangibly reduced the shares of Western companies in oil and gas deposits, and redistributed proceeds from production of hydrocarbons in its favor.

A number of oil companies, for instance the French company Total, have accepted the new terms on the grounds that high prices on oil are making its production in Venezuela a lucrative business. The Venezuelan government has even paid it about $830 million to make up for its reduced share in the project.

This is a general trend. When prices on natural resources are skyrocketing, the state usually enhances control over them and the proceeds from their production.

But the Americans from Exxon Mobil were too stubborn, and in 2007 the Venezuelan government forced them to leave the country, thereby depriving the company of a very attractive project. Exxon Mobile sued PDSVA in several European and American courts, demanding full and fair compensation for the lost project. Last week, courts ordered the freezing of $12 billion of PDSVA's global assets as a guarantee on the eve of the trial.

PDSVA is a powerful and rich company. It has about $90 billion worth of property all over the world. If the court orders are fulfilled, the company and Venezuela as a country will sustain heavy losses. Venezuelan President Hugo Chavez immediately threatened to discontinue all oil supplies to the United States. If he does this, the U.S. economy will suffer disastrous consequences - there will be a huge shortage of oil in the U.S. market. The United States imports about 10 million barrels of oil per day. Venezuela ranks fourth in U.S. oil imports after Canada, Saudi Arabia, and Mexico.

But such a step would be fatal for Venezuela. Unable to diversify its exports, it sells almost all of its oil to the United States. This is why Chavez did not fully implement his threat. It was announced that only the "root of all problems" - Exxon Mobil - will be barred from Venezuelan oil. Up until today, the company received from 90,000 to 170,000 barrels of oil from Venezuela. This loss will not be a serious blow to Exxon Mobil or oil consumers in the United States. Moreover, other OPEC countries have promised to sell more oil to the United States in the event of a shortage.

But the legal war between Exxon Mobil and PDSVA will not end quickly, and Chavez's surcharge will be making oil prices higher for a long time.

The inflexible U.S. policy towards "objectionable" oil producers backfired against Washington by increasing oil prices. It is doing all it can to prevent domestic and foreign companies from taking part in oil projects in Iran, thereby aggravating tensions in the world oil market.

Analysts from the international bank Goldman Sachs, who predicted a price of $100 per barrel that was reached on January 3, 2008, are saying that the recession in the United States will not bring oil prices down and that in a year oil will cost $105 per barrel. Russia and other oil producers that received record proceeds from oil exports last year may count on super profits this year as well.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.


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