The Dept of no kidding: "U.S. vulnerable to oil cutoff"

Wednesday, June 14, 2006 at 04:44 PM

One of the least surprising reports I've seen in ages:
GAO warns U.S. vulnerable to oil cutoff

GAO warns U.S. vulnerable to oil cutoff
Associated Press
WASHINGTON - Tight oil markets and little spare production capacity worldwide make the United States more vulnerable today to a cutoff of Venezuelan oil than three years ago when a strike curtailed Venezuelan supplies, a congressional study warns.

The report by the Government Accountability Office says a Venezuelan oil embargo against the United States would cause oil prices immediately to jump by $4 to $6 a barrel and increase gasoline prices at the pump by 11 to 15 cents a gallon.

A six-month loss of 2.2 million barrels a day of Venezuelan production - about what was lost during the strike by Venezuelan oil workers during the winter of 2002-03 - could cause a price spike of $11 a barrel and cut U.S. economic output by $23 billion, the report said, citing an Energy Department computer model analysis.
U.S. officials have minimized the likelihood of such a cutoff because Venezuela relies heavily on oil revenues from the United States to pay for its domestic programs.

Administration officials told the GAO investigators that "they do not have contingency plans to deal with oil losses specifically from Venezuela or any other single country" other than tapping the U.S. Strategic Petroleum Reserve or using diplomacy to get other countries to boost production, the draft report, obtained Wednesday, said.

When a strike by Venezuelan oil workers in the winter of 2002-2003 reduced the country's production by some 2.2 million barrels a day, the U.S. succeeded in getting other producers, especially Saudi Arabia, to fill the gap, the GAO study said....