This is a partial transcript from "Your World with Neil Cavuto," August 11, 2005, that was edited for clarity.
NEIL CAVUTO, HOST: So, you think oil prices are high now? What if I told you that one man could put us over $100 a barrel? His name is Hugo Chavez. His nation, Venezuela, and his reputation, well, a lot of people just think he's nuts. Should we worry?
Let's ask former California Congressman Bob Dornan in Washington and Phil Flynn of Alaron Trading from Chicago.
Congressman, to you first. He's the loose cannon in our own hemisphere, or is he?
BOB DORNAN, FORMER U.S. CONGRESSMAN: Neil, you're really on to something.
He's not only a friend of Castro and a Castro wannabe and a hater of business, of the church. He doesn't have Castro's Jesuit education or his law degree, and he's not as smart by a long shot. But you're right. He can devastate oil. Where is Venezuela? I learned it from your show. Is it four, after Canada, the Middle East, Nigeria? Or is it three?
If he decides to really get ugly in this area, we've got a problem. We've got our hands full with FARC next door in Colombia. And never, since Roosevelt took an interest in Central and South America, Franklin Roosevelt, have we had a time when a dictator in the south can so wreck things for this hemisphere because of our total involvement in the Middle East, which is also partly oil.
CAVUTO: Let me ask you, Phil Flynn, the unthinkable. Let's say Chavez stops shipping oil to this country.
PHIL FLYNN, ALARON TRADING: Well, if he just stops sending it to our country, it might be OK, as long as he sent it to some other country. I think what would happen...
CAVUTO: Why would that be OK?
FLYNN: Well, because, really, what would happen is that, more than likely, some wise entrepreneur, when oil prices were at $100, would sell it back to us.
It would go somewhere else. And so, in that situation, it is right. But, if he played the Saddam Hussein card, where he decided to stop oil, all oil exports, to make a point, then he could do some real serious damage to the world economy, and a lot more than Saddam Hussein could have, because the world has no spare capacity to make up for the loss of Venezuelan oil.
CAVUTO: And, in this guy's case, he's right next door, essentially. Yes.
FLYNN: It is right next door. He's the number one foreign importer, like Bob said.
And the thing that's really important is, our refineries are really set up to refine Venezuelan oil. If he cut off our oil shipments and we had to get it from elsewhere, it would mean even slower refining, more refining bottlenecks and more record-high prices.
CAVUTO: Bob, I'm hearing that, built into the price of oil, the reason for the run-up, is growing anxiety over what's going on in Venezuela. Do you buy that?
DORNAN: I think so.
I mean, sometimes, the oil companies look very ham-fisted when it comes to future projecting. But let's face it. You've had a lot of the experts on your show they have futurists, to add to their geologists, that look at long trends, 10, 20, 30 years from now. And they're all very nervous over this guy. And I don't even think there is a CIA role here. We have to be very careful.
I saw one of Oliver Stone's worst propaganda films ever on one of the cables last night, as a matter of fact, "Salvador." In it, he's preaching to the world that the United States is the evil country, with the CIA corrupting nations everywhere. And that's this guy, Chavez's theme. Didn't he make a speech the other day that says, we're planning to invade him?
That's Castro. That's Kim Jong Il, very ill.
DORNAN: They all maintain their power by saying the U.S. is about to invade.
CAVUTO: Well, let me ask you, Phil, just for a pure numbers guy on this.
CAVUTO: Even if he just keeps talking bellicose like this, strategy, saying, this one thing that he was doing earlier this week, don't have any Venezuelan contractors working on American refineries in that country or what have you, play this out for me.
CAVUTO: What are we looking at?
FLYNN: All right, Hugo Chavez goes off the deep end, which wouldn't be that far of a move.
FLYNN: But, assuming that he does, he pulls off his oil exports. The U.S. says, hey, wait a second. We're not getting any more oil. They stop oil imports. Oil prices shoot towards $100 a barrel. The world gets caught into a recession. It could happen very easily.
And and the worry about Chavez is, he is a loose cannon. And the concern is that a lot of the poor people in Venezuela, they love this guy. Why? Because he's taking money from the rich and giving it to the poor. And I will tell you one thing: The only thing that's keeping him in power right now is $65-a-barrel oil, because that's covering up for a lot of the sins and the mismanagement of his economy.
If oil prices go down he will be out on his ear.
CAVUTO: Guys, I want to thank you both very much, Phil Flynn, Bob Dornan. Appreciate it, guys.
CAVUTO: We will see where this all goes.
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