PetroCaribe: Crude Appeal Strains US Ties

July 2008 | Economic Analysis

BMI View: Faced with mounting energy bills and shrinking popular support, an increasing number of Central American and Caribbean governments have turned to Venezuelan leader Hugo Chávez for relief. His PetroCaribe oil initiative may be too sweet to ignore in the short term, especially with a spate of presidential elections pencilled in for next year. However, by aligning themselves too closely with Caracas, the region risks straining relations with the US - still its key economic and commercial partner - at a time when bilateral free trade deals, such as DR-CAFTA, are coming under closer scrutiny.

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