NEW YORK -- Venezuelan President Hugo Chávez threatened to cut off oil sales to the United States over an escalating fight between Exxon Mobil Corp. and the nation’s state-controlled oil company, reports The Wall Street Journal.

In recent weeks, Exxon won court orders in the United States, United Kingdom and elsewhere to freeze assets owned by state-controlled Petroleos de Venezuela (PdVSA) to ensure payment if Exxon wins an arbitration case over its attempt to freeze oil assets overseas. 

If Chávez manages to spook the oil market, and prices rise, Venezuela wins by getting more oil income, analysts noted. While the former army officer is likely bluffing, he does seem intent on using his country’s vast oil wealth as a political weapon. Chávez has sent increasing amounts of oil to China in the past few years and vows to continue that trend. He also has reasserted government ownership and control of privately run oil projects, reports the newspaper.

“If you end up freezing [Venezuelan assets] and it harms us, we’re going to harm you. Do you know how? We aren’t going to send oil to the United States,” Chávez said yesterday in his weekly radio-and-television address. 

PdVSA relies on its U.S. refining subsidiary, Citgo Petroleum Corp., to process the country’s thick crudes, which can be more difficult and expensive to turn into gasoline and other products. Most analysts say Venezuela’s oil would fetch much less from other countries than it gets through Citgo.

Short-term moves by Venezuela could unsettle oil markets, which have become volatile because of the tight margin between supply and rapidly growing demand. But oil is a global commodity, so the United States might also get around Venezuela’s embargo relatively easily by getting more oil from other nations. Another country could also buy Venezuelan oil and resell it to the United States.