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Russia and Venezuela had a huge role in the run-up in oil prices, both of them strutting with a newly found bravado, mostly fueled by the enormous influx of petro-money.

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Putin and Chavez with Oil at almost $100

Russia and Venezuela had a huge role in the run-up in oil prices, both of them strutting with a newly found bravado, mostly fueled by the enormous influx of petro-money.

Russia and Venezuela had a huge role in the run-up in oil prices, both of them strutting with a newly found bravado, mostly fueled by the enormous influx of petro-money. At $100 their leaders, Vladimir Putin and Hugo Ch├?┬ívez were supposed to be 1000-pound gorillas; both would be reduced to monkeys even at $60 oil because of the way they fashioned their economies and the way they organized their governing.

The voting this last weekend, apparently gave Putin a license to prolong his stranglehold on Russia, which he has been re-Sovietizing under another name. Hugo Ch├?┬ívez on the other hand, who under normal circumstances would be a comic-opera figure, managed the impossible. Even at almost $100 oil, in a referendum many in Venezuela called (quite correctly) also as a vote on sanity, Ch├?┬ívez came out at the short end.

This is a tale of two countries, united by a leadership style, needing an enemy to rally popular support. The easy enemy is of course the United States and what it represents. The darkest part of all this is a thinly-disguised envy of America which permeates many countries, including most of our “friends.” Inflating anti-Americanism is our own highly unpopular president who is made all the more vulnerable by thoughtless Americans in that strange self-flagellation unique to American politics.

Politics should be one thing….Committing economic suicide should be another. Let’s face it: neither Putin nor Ch├?┬ívez would distinguish between a Democrat or a Republican in the White House in their quest to harm the American economy and cut down in size what they perceive as American hegemony. Oil is their tool.

One reason for Putin’s popularity at home is that he has tapped into Russians’ two strong yearnings: a cultural affinity for strong, Tsar-like leadership, quite different from Western European and North American predilections, and an understandable hunger for prestige and world recognition, a need to be relevant. In the course of 15 years, the Russian people saw their country go from superpower to junior partner, and then thanks to Putin, to a renaissance of power. Unlike during the Soviet era, Putin’s sojourn has not been on the back of nuclear weapons, which the country still owns in abundance, but has been fueled by oil and gas.

With Vladimir Putin, post-Soviet Russia has recovered much of its Soviet-era position and power that was bestowed upon it by its energy resources. What Nikita Khrushchev and Leonid Brezhnev could not do with nuclear weapons and raw military power, Putin has attempted with oil and gas, in what arguably can be called energy imperialism.  
The recent elections, even with the observer assertions of unfairness, put Putin in a commanding position. He will be around for a long while and he has to be reckoned with. He knows it, we know it and the other emerging super-power, China, with even more dire energy supply predicament, also knows it.

Ch├?┬ívez is another matter. Cheered on by the unrepentant Fidel Castro, Ch├?┬ívez fashioned himself as the new Simon Bolivar or, at least Che Guevara, he thinks he is above the law and the rules even of his own one-sided game, in the name of his definition of revolutionary bliss.

Make no mistake. The weekend referendum was a crashing defeat for Ch├?┬ívez. It proved that even in poverty prone, populist infused Venezuela with almost complete control of the media and government machinery, he lost. Kudos go to Venezuelans whose majority saw the emptiness of populist sloganeering while the country has been falling apart. Management of the country simply cannot be done by slogans. Oil production, upon which everything depends, has dropped to the lowest production level since the first nationalization in the 1970s.

And consider this. In the recent Transparency International’s ranking of the corruption perception index, Russia came in at number 143, sandwiched between Indonesia and Nigeria (!) and Venezuela at number 162 was much closer to the bottom-ranked Myanmar and Somalia at 179 and 180. At least in Venezuela, populism can take a leader that far. In Russia, apparently that point has not been reached yet.

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Mr. Economides is editor-in-chief of the Energy Tribune.

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