Hugo Chavez has recently been a very good OPEC member. He´s been keeping oil production down. But this reduction has not taken place because Hugo Chavez wants to be a good OPEC member. The paradox of authoritarian leaders who nationalize oil production is that oil production goes down simply because they are bad at running their own, inefficient state oil companies. And the price of oil goes up. Personally I don´t believe that oil multinationals are the solution either. The best way for a country to get the most for its citizens is to blend well regulated intervention by multinationals with a very good schooling of local energy professionals. Rushed decisions a la Chavez simply fail.
Posted on May 7, 2006