The plans presented for an oil barter was at the regional Petrocaribe summit in Cuba. This is a summit of oil consumers and exporters. Hugo Chavez explained that they are creating a new brand of geopolitics revolving around oil. He added that the group is not in the service of “imperialism and capitalists.”
The organization Petrocaribe was founded in 2005. 17 of the states in the organization have their oil supplied from Venezuela at preferential rates. The rates are financed by low-interest loans. Honduras had joined the organization on Friday.
Mr. Chavez gave the suggestion to extend the exchange scheme like the one between Venezuela and Cuba, which are close allies. Their current deal is this: Venezuela sends almost 100,000 barrels of subsidized oil a day. Cuba in return has doctors and teachers offer free services in Venezuela.
According to BBC, all members of the group have fragile economies and are struggling to cope with the rise in the price of oil. Petrocaribe is the lifeline for most of these countries.
Outside of the Middle East, Venezuela has the largest oil reserves. The organization initiative allows signatory countries to defer payment on forty percent of the oil they buy from Venezuela for up to 25 years. They only pay a one percent interest rate.
Hugo Chavez has been accused by critics of using oil wealth to extend the political influence of both Cuba and Venezuela. While the country is a leading supplier of oil to the United States, Mr. Chavez said he is focused towards fostering energy ties across the Carribean.
“Despite the Yankees, our gas is at the service of Venezuela first, and next to our brothers in the Caribbean,” according to Mr. Chavez.