While PDVSA head Rafael Ramirez said Venezuela was still "ready" to cut off supplies if the lawsuit filed by ExxonMobil persisted, he did note that South America's top oil supplier and lone member of the Organization of Petroleum Exporting Countries did not want it to come to that.

Most analysts concluded that Venezuela's bluster over the ExxonMobil case and threat of cutting off supplies was more posturing than a real possibility. As the fourth-largest exporter to the United States, Venezuela can hardly afford to shut off supplies to the United States, even for a short while, said Patrick Esteruelas, a Latin America analyst for the New York-based think tank Eurasia Group.

"The Venezuelan government has become more and more dependent on oil, and oil exports to the U.S. in particular, making it highly unlikely that Venezuela will cut off oil supplies to the U.S. despite the latest threats," said Esteruelas, who noted that Venezuelan crude and refined product exports to the United States averaged 1.35 million bpd in 2007, close to two-thirds of Venezuela's total oil exports of 2 million bpd.

However, Venezuela has already decreased its exports to the United States in recent years, a result of production shortcomings, according to some PDVSA officials.

In July, Luis Vierma, exploration and production vice president at PDVSA, said Venezuelan oil faces a "significant operational emergency" if it does not increase the number of rigs operating in the country and that the state firm fell short of its 2007 goal of getting 191 rigs online in 2007 and producing some 3.3 million bpd.

Meanwhile, ExxonMobil scored a major victory in its ongoing dispute with Venezuela and PDVSA when it won a court injunction to freeze some $12 billion in PDVSA assets amid its ongoing dispute with Venezuela, which seized its project in the oil-rich Orinoco Belt during its nationalization of the oil sector last year.

Venezuelan officials initially denied the full $12 billion had been frozen by courts in The Netherlands, England and the United States, though they conceded that $300 million was frozen for a short time.

While most other foreign firms accepted the terms of the nationalization in which PDVSA assumed majority control of their projects, ExxonMobil refused, leading to the seizure of its stake in Orinoco.

Venezuelan officials including President Hugo Chavez, an ardent critic of the Bush administration, accused Washington of using ExxonMobil in a proxy war against his leftist administration.

"Clearly there is an intention to start an economic war with our country," said Ramirez.

The energy leader's remarks are reminiscent of the rhetoric Chavez regularly invokes when it comes to the United States. The Venezuelan president has accused the United States of meddling in Venezuelan internal affairs for years and attempting to foment his removal from office, including a failed coup attempt in 2002.

Bush officials repeatedly deny playing a role in the coup.

In response to the seizure, it appears Venezuelan lawyers will begin preparing their response to the injunction, a particular challenge considering the supposed disbursement of the PDVSA funds in question are in banks both in the United States and Europe.

"It's a real first-inning win for ExxonMobil," Joseph Profaizer, an attorney specializing in international disputes with the Washington-based firm of Paul Hastings, told United Press International.

Profaizer noted that ExxonMobil appears to have the law on its side considering international law generally prohibits the expropriation of property without compensation.

ExxonMobil officials claimed that the compensation Venezuela offered for its stake in Orinoco -- reportedly less than $6 billion -- was not adequate.

"For three different courts across the world to issues injunctions like this is a very significant event," added Profaizer.

Mark Albers, senior vice president for ExxonMobil, asked about the dispute Tuesday in Houston at the annual international energy conference CERAWeek, refused to enter the fray.

"Obviously (there are) a number of issues that the courts are going to need to decide so I'm not going to comment on those," Albers said. "I will say we do remain interested in getting into substantive discussions with the Venezuela government and with PDVSA around the fair market value for the assets that have been expropriated."

(UPI Energy Editor Ben Lando contributed from Houston.)

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