Chavez: No plan to suspend US oil shipments

CARACAS, Venezuela, Mar 25 (Reuters) Venezuelan President Hugo Chavez said his government had no plan to suspend oil supplies to United States but would prefer to give priority to energy deals with Latin American neighbors.

Speaking to regional central bank representatives, Chavez yesterday took a softer line after earlier harsh rhetoric and threats to cut off US petroleum supplies should Washington ''cross the line'' in their heated diplomatic dispute.

Venezuela, the world's fifth-largest oil exporter and a key US crude supplier, has signed energy pacts with Latin American neighbors, China and India as Chavez seeks to break his nation's traditional economic reliance on the United States.

''It's not that we have a plan to suspend shipments of oil to the United States or anywhere else,'' he said. ''We send to China too and if Europe needs it, we've told their leaders, too. It's just that we want to give priority to Latin America and the Caribbean.'' Chavez' comments came a day after the US ambassador to Caracas said Venezuela had suspended a threat to restrict or ban flights by US airlines after the two governments agreed to negotiations to end a dispute over aviation rights.

A firebrand former soldier, Chavez has become one of Washington's fiercest critics and has clashed with US officials over his socialist revolutionary message and his close ties to Cuba and Iran.

Relations between the two governments deteriorated earlier this year after Chavez expelled a US naval attache he charged with spying and Washington responded by kicking out a Venezuelan diplomat working in the embassy.

Chavez warned later he could cut off oil supplies to the United States and shut down oil refineries owned by state oil company PDVSA in the United States as their diplomatic relations were soured by the spying charges.

The Venezuelan leader presents his socialist reforms and ideas of integration as alternatives to US free-trade proposals for the region. Those ideas include a South American central bank, a regional pipeline and energy initiative.

But US officials say he has used Venezuela's oil wealth to spread an anti-democratic message. Washington dismisses his oil threats and anti-US attacks as populist rhetoric meant to maintain domestic support before elections in December.

Reuters DH VP0600