Washington Extra – Waiting for Hugo

May 25, 2011

Grab a chair, some drinks and snacks and get ready for the show.

The United States slapped sanctions on Venezuela’s state oil giant PVDSA for trading with Iran, a move that could worsen Washington’s already sour relations with Caracas. Now we’re waiting for President Hugo Chavez to respond.

Expect a lot of noise, in typical Chavez fashion. In the warm-up act, one ally called the sanctions “ridiculous” and accused the United States of wanting to “once again…turn into the global policeman.”

Chavez himself might make some threats against his biggest foe, including an old one about cutting off oil supplies to the United States. He’s done it before — in 2004, 2006, 2008 and 2010, and maybe more times than we can count.

But it never comes to anything. The fact that 45 percent of Venezuela’s oil goes to the United States might explain why. With that kind of dependence, Venezuela is unlikely to stop the shipments, though there may be some tit-for-tat retaliation. The United States and Venezuela need each other, no matter what the Presidente says and no matter how long he talks.

Here are our top stories from Washington…

US sanctions Venezuela’s oil giant for Iran trade
The United States slapped sanctions on Venezuela’s state oil giant PDVSA in its latest effort to disrupt Iran’s fuel supplies, a move that may provoke a fierce response from Venezuelan President Hugo Chavez. The sanctions would bar PDVSA from access to U.S. government contracts and import/export financing. But their impact is likely to be modest, as they do not affect the company’s sale of oil to the United States and other markets.

For more of this story by Andrew Quinn, read here.

Netanyahu says will give up some land for peace
Israel is prepared to make “painful compromises” for peace with the Palestinians, including the handover of land they seek for a state, Prime Minister Benjamin Netanyahu told Congress. Palestinians swiftly dismissed the Israeli leader’s terms for a deal as placing more “obstacles” in diplomacy’s way, casting doubt as to whether frozen peace talks may actually resume anytime soon.

For more of this story, read here.

Debt talks resume with focus on healthcare
Talks to avert a potentially catastrophic debt default resume after signs Republicans might soften their stance over a main obstacle to a deal with Democrats, but hopes for a breakthrough remain slim. A congressional aide said the session would focus on savings in Medicare and Medicaid, government-funded healthcare at the core of so-called federal entitlement programs that have emerged as a major block to an agreement.

For more of this story by Alister Bull and Richard Cowan, read here.

Pakistan returns US helicopter from bin Laden raid
Pakistan has returned wreckage of a helicopter destroyed during the raid that killed Osama bin Laden, a Pentagon official told Reuters, but the gesture was expected to do little to improve strained ties. The Navy SEAL team that stormed bin Laden’s compound blew up the chopper after it was damaged to keep sensitive technology out of enemy hands.

For more of this story by Phil Stewart, read here.

House panel votes to delay swaps market rules
Regulation of the swaps market, a $600 trillion behemoth that is largely unpoliced, would be delayed until September 2012 under a bill approved by a House of Representatives committee. The measure is not expected to become law. Democrats and the White House oppose it, but it shows the clout of Wall Street almost three years after the financial crisis.

For more of this story by Kevin Drawbaugh, read here.

From elsewhere…

Obamas meet UK royals to seal “special” relations
President Obama was treated to royal pomp at Buckingham Palace on a two-day state visit aimed at ensuring the United States and Britain keep the “special” in their relationship.

For more of this story by Jeff Mason and Steve Holland, read here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.


Photo Credit: REUTERS/Jorge Silva (Chavez  greets supporters fromat Miraflores Palace  in Caracas )

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