Big Oil; Death Throes

President Hugo Chavez on Sunday threatened to stop sending oil to the United States unless it halted an "economic war" that he said included an Exxon Mobil lawsuit freezing $12 billion in Venezuelan assets.

The anti-American leader of a major crude exporter to the United States also warned that such U.S. aggression could cause world oil prices to spike to $200 a barrel.

Oil prices rose this week in part because of the self-styled socialist revolutionary's dispute with the largest U.S. company over compensation for Chavez's nationalization last year of an Exxon Mobil Corp (XOM.N: Quote, Profile, Research) project.

The administration of President George W. Bush has distanced itself from the Exxon legal offensive, in which the oil company won international court orders freezing assets of the state oil company PDVSA.

"If you freeze us, if you really manage to freeze us, if you damage us, then we will hurt you. Do you know how? We are not going to send oil to the United States, Mr. Bush, Mr. Danger," Chavez said on his weekly TV show.

"Venezuela will join in your economic war and other countries will be with us in the economic war," added the ally of oil producers such as Iran and Ecuador.

Chavez has frequently issued conditional threats to stop shipments to its biggest oil customer, but has maintained supplies despite clashing with Washington over everything from crude prices to free trade to democracy.

"Never again will they rob us -- the Exxon Mobil bandits. They are imperial, American bandits, white-collared thieves. They turn governments corrupt, they oust governments. They supported the invasion of Iraq," he said.

Exxon retaliated for the seizure of a heavy crude upgrading project, winning the first big court battle over compensation in a wave of takeovers that Chavez says will help create a socialist state.

The court rulings in several countries mean the state oil company -- Chavez's main income source -- cannot sell certain assets or move some funds while the compensation case is reviewed.

BIG OIL STRIKES BACK

Exxon's move is the boldest challenge yet by an oil major against any of the governments from Russia to Ecuador that have moved to increase their control over natural resources as energy and commodity prices have soared.

Industry analysts believe other companies could follow Exxon's lead if it prevails in a court battle that could take several years.

Chavez, who calls capitalism an evil, accuses big oil companies and large consumer nations of seeking to control the natural resources of major producers such as Venezuela.

His comments on Sunday followed days of a blitz on state television of programs and advertisements denouncing Exxon as a predator company seeking to plunder Venezuela.

The court orders were a new blow to Chavez, who lost a referendum on expanding his powers and enshrining socialism as a state goal in December and has struggled for months to combat rampant inflation and chronic food shortages.