Venezuela has provided about 11% of U.S. oil imports, roughly 1.2 mb/d.   Two trends are putting that supply at risk.  The first is Venezuela’s increased commitment to sell its oil to Cuba, to China, and to other non-Japanese Asian countries.  This commitment may be partially one of political comradeship, but it also is based on Venezuelan debt to certain Asian countries.

The second is the decline in Venezuelan production that has come from the increasing financial chaos and expropriation activities caused by its virtual dictator, Huge Chavez.  I think Chavez and his plan are imploding.   Continuing oil production declines of perhaps increasing magnitude can be expected to result from the continuing take-over by Chavez of foreign owned and operated drilling and supply companies.   Chavez has neither the capital nor the expertise to operate this industry himself.  Here is a recent report from Bloomberg:

Venezuela Oil Shipments to Cuba Rose by 32%, Asia Sales Doubled

By Steven Bodzin

June 9 (Bloomberg) — Venezuela’s shipments of crude oil and refined products to Cuba gained 32 percent last year and sales to Asia doubled under President Hugo Chavez’s strategy of diversifying the country’s oil sales to rely less on the U.S.

Sales to Cuba climbed by 28,000 barrels a day to 115,000 barrels a day, state oil company Petroleos de Venezuela SA, or PDVSA, said in an annual report on its Web site late yesterday. Sales to Asia gained by 223,000 barrels a day to 422,000.

Cuba pays for much of its Venezuelan oil through sending thousands of doctors, sports trainers and other advisers to Venezuela and its allies. Cuba received twice as much crude oil in 2008 as a year earlier as a joint venture with Venezuela restarted a refinery in the Cuban city of Cienfuegos.

Most of PDVSA’s Asian shipments went to China, India and Singapore, with sales to Japan falling to zero, the company said. Venezuela is paying off $8 billion in loans from the China Development Bank and $3.5 billion in loans from Japan’s Mitsui & Co. and Marubeni Corp. with oil and related products.