Boycott Watch
July 24, 2006
Citgo Launches PR Campaign - Hugo Chavez Blinks
Summary: Hugo Chavez launches a PR campaign to win over the American consumer despite threats of cutting off his oil supply to the US
    Venezuelan president Hugo Chavez has been irritating the US for a long time, making statements threatening to deny his oil to US markets, thus threatening the US economy with higher gasoline prices. Chavez's has also made anti-US political statements while at the same the US has made statements of disdain for Venezuela's lack of democracy, to say the least.

   Venezuelan oil is important to the US economy, partly because of its supply volume and proximity to the US. Venezuelan oil tankers can make a round trip in 7 days, as opposed to oil tankers from the Persian Gulf, which require a 21 day turn around. While the distance factor appears to be significant for supply, the number of ships in service compensates for that factor. The distance factor does, however, allow for greater flexibility in the supply chain, which is not only advantageous for the US, but for Venezuela as well as they can adjust shipment schedules more easily based on demand, but that also allows for quicker economic effects on the US economy if Hugo Chavez chooses to deny the US its oil.

   Hugo Chavez's threats to cut off his oil supply to the US now appears to just be saber rattling. While the US depends on this foreign oil supply, Venezuela depends on the US purchasing its oil for its economy as well, thus interdependency, but he US has shown it can run without Venezuelan oil, as proven by the Venezuelan oil strike a few years ago.

   In the mean time, Venezuela's wholly-owned oil company Citgo has just started a PR campaign featuring television commercials showing happy drivers and featuring the Three Dog Night song "On the road to Shambala" which is clearly designed to make people feel good about Citgo. The song starts with the lyrics "Wash away my troubles, wash away my pain, With the rain in Shambala. Wash away my sorrow, wash away my shame, with the rain in Shambala (chorus). Everyone is helpful, everyone is kind, on the road to Shambala. Everyone is lucky, everyone is so kind, on the road to Shambala."

   Venezuela has chosen this upbeat utopian song to obviously make people happy, thus change the negative feeling Americans have toward Citgo products via Venezuela. Could this be a reaction to overcome an apprehension or boycott of Citgo gasoline? Surely, but more importantly, it shows that Hugo Chavez has blinked - he knows he can not afford he loss of US oil revenues, and that he needs US citizens to buy gasoline from his wholly-owned company Citgo gas stations because he needs the oil revenue, and possibly a boost for his own ego as well.

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