Maybe Venezuela is ripe for that kind of hostile takeover. Chávez apparently has sold oil to China at $5 per barrel out of stupidity rather than as an attempt to buy favour. Writes Caracas Chronicle (HT: Xavier Marquez):
One story that should be getting more play abroad is the simply amazing tale of the oil Venezuela is selling to China for $5/barrel…only for the Chinese to turn around and sell it on to third-parties (read: gringos) at a markup of over 1000%. (And no, that is not a typo.)
The whole crazy story, revealed in the Wikileaks data dump, beggars belief in so many directions at once your head almost spins. Venezuela is sending foreign aid – to China! – to the tune, potentially, of tens of millions of dollars per day! in the form of oil that ends up in your gas tank!
The obvious question is “why?!” And the answer, as far as I can tell, is “just because…”
And that, I think , is why stories like this don’t get more play. Narratively, they’re just deeply unsatisfying. You can’t fit them into any of the tropes that dominate public understandings of Chávez abroad: Chávez-the-Budding-Dictator, Chávez-the-Buffoon and Chávez-the-Dashing-Champion-of-the-Poor. Basically, they don’t make any sense.
It isn’t because Chávez is a despot that Venezuela is handing over gobs of free cash to the Chinese. And it isn’t because he’s enamored of Chinese communism, either.
The reason China gets those $5 oil barrels is more banal and, in its own way, far more tragic: the people now charged with reaching international supply agreements on PDVSA’s behalf couldn’t negotiate their way out of a wet paper bag. This is happening because PDVSA is now so criminally mismanaged that the government ends up signing multimillion dollar deals before anybody’s really grasped what they’ll mean.