Via the BBC: Venezuela gives US cheap oil deal

Officials from Venezuela and Massachusetts have signed a deal to provide cheap heating oil to low-income homes in the US state.

The fuel will be sold at about 40% below market prices to thousands of homes over the winter months.

I must confess: when this first came up several months back, I figured it was all rhetoric. However, give Chavez credit: he said it, he did it.

The question becomes: why? I vote for a political jab at President Bush. Although I will grant that if Chavez wanted to actually create optimal political harm, withholding fuel would be more effective.

That leaves the “he’s nuts” hypothesis, which is never far from the surface when dealing with Chavez, although, that’s trite and clearly, as I believe I have noted before, despite all his obvious buffoonery, if he’s crazy, he’s crazy like a fox. (And no, I don’t actually think he’s crazy–although I do maintain that the man often behaves like a cartoon. For evidence, you can return to the sombrero story).

The only other hypothesis is that he did it for truly humanitarian reasons, but really, of all the people in the world to help, the poor in a major US city aren’t the most needy (i.e., there are needier folks nearer to home). This leads back to the “political jab” hypothesis: little Venezuela helping out the citizens of the US because the big bad Bush administration won’t.

Regardless, at least some folks will get some price breaks and the infusion of this supply into the market will have the effect of lowing price, at least some, for everyone else. More supply is good.

And the deal may be coming to NYC as well:

Talks are under way to agree a similar deal to provide discounted heating oil from Venezuela to low-income residents in New York’s Bronx district.