Venezuelan minister of energy threatens to cut off oil to the US

Ramírez said that Venezuela, particularly the oil giant state company Pdvsa, is ready to decide on cutting oil supply to the United States and such action is “quite feasible.”

Oil is fungible. It really does not matter whether the US gets it from Saudi Arabia or from Venezuela. It makes sense for Venezuela to sell to the US because of shipping costs but if they cut China a sweet deal, China will need less oil from the mid-east.

While such action might be feasible, it might also give Bush incentive to “do something about it”, even though it probably does not matter much. There is a difference between them selling that oil somewhere else and them taking supply off totally.