Sept. 12 (Bloomberg) -- Venezuelan President Hugo Chavez yesterday ordered the American ambassador to Caracas to leave and threatened to halt oil exports to the U.S. in a show of solidarity with his Bolivian counterpart Evo Morales.

Chavez recalled his ambassador from Washington and said he won't send another until after the U.S. presidential elections in November. Chavez and Morales, who expelled the top U.S. envoy from his country two days ago, have accused the U.S. of backing opposition movements in their countries.

Chavez, a self-proclaimed socialist who refers to America as an ``empire,'' threatened to halt Venezuelan oil shipments to the U.S. if it attacks his country. Venezuela is the fourth-biggest supplier of foreign crude oil to America.

``The U.S. is behind the plan against Bolivia, behind the terrorism,'' Chavez said at a political rally for his United Socialist Party of Venezuela. ``We're committed to being free. Enough crap from you Yankees.''

In a televised speech, Chavez gave Ambassador Patrick Duddy, who arrived in Caracas a year ago, 72 hours to depart. Jennifer Rahimi, a spokeswoman at the U.S. embassy in Caracas, said this morning that the State Department still hasn't received any official notice about Duddy's expulsion.

Oil Sales

The South American country sold the U.S. 1.42 million barrels of crude oil a day last year, according to U.S. Energy Department figures.

``Markets seem agitated by the risk of escalation,'' Lehman Brothers Holdings Inc. economist Gianfranco Bertozzi wrote today in a note to investors. ``We doubt we will see any, but superficial conflict will likely go on in the near term.''

Venezuela's bonds plunged to the lowest since May 2004 at 9:50 a.m. New York time. The yield on Venezuela's benchmark 9.25 percent securities due in 2027 jumped 95 basis points, or 0.95 percentage point, to 11.7 percent, according to JPMorgan Chase & Co. The bond's price tumbled 6.5 cents to 81.5 cents.

Chavez, who has built his political career on thwarting U.S. influence in Venezuela and Latin America, may have expelled the ambassador to rally support among poor voters ahead of state and city elections scheduled for November, said Jose Vicente Carrasquero, a professor of political science at the Universidad Simon Bolivar in Caracas.

`Tendency to Overreact'

``The president has a tendency to overreact,'' Carrasquero said in a telephone interview. ``He's appealing for people's sympathy.''

Morales declared the U.S. ambassador to Bolivia persona non grata Sept. 10 after accusing him of supporting regional leaders seeking more autonomy. The U.S. responded yesterday by ordering Bolivia's ambassador to Washington to leave.

Morales's move came during a week of intensifying political disputes between his government and regional leaders opposed to a new constitution and energy taxes. Morales frequently accused U.S. Ambassador Philip Goldberg of conspiring with opposition groups, charges the State Department called ``baseless.''

The expulsion of the two U.S. ambassadors is another example of how Chavez has sought to forge a coalition with other socialist-leaning governments in Latin America that are prepared to confront the U.S. The Venezuelan leader has tapped into his country's surging oil revenue to provide billions of dollars of aid and financing to his allies.

``There are a lot of countries in Latin America with social debts that can be taken care of with Chavez's assistance,'' Carrasquero said.

Strained Ties

Ties between Venezuela and the U.S. have been increasingly strained over the past year as George W. Bush's administration has stepped up charges that Chavez is funding Marxist guerrillas in neighboring Colombia and ignoring the increased flow of illegal drugs across his country's borders.

Chavez has countered that the Bush administration is helping opposition parties in Venezuela try to overthrow him. Yesterday, he ordered an investigation into an alleged military plot to assassinate him, which Foreign Minister Nicolas Maduro said had U.S. support. The minister didn't provide any evidence.

The Venezuelan leader has also pledged support for Russia's recognition of the independence of the Georgian breakaway regions of South Ossetia and Abkhazia. Both the U.S. and Europe have condemned Russia's actions in Georgia.

Two Russian bombers landed in Venezuela this week and plan to carry out training exercises over neutral waters.

Hundreds of Chavez backers gathered outside the Miraflores presidential palace last night to show their support, according to images broadcast by state television.

`Revolutionary Movements'

``The U.S. is trying to stop revolutionary movements in Latin America,'' Chavez said. ``This is a dignified people. Damn Yankees, go to hell 100 times.''

Chavez has been named directly in a U.S. criminal trial taking place in Miami this week. Prosecutors have provided evidence that the president directed the head of Venezuela's intelligence agency to manage a scandal caused by the seizure of $800,000 in cash at an Argentine airport.

Prosecutors allege that the money came from the Venezuelan government and was intended to finance the election campaign last year of Argentine President Cristina Fernandez de Kirchner. Both Chavez and Fernandez have denied the allegations.

Also this week, the U.S. Transportation Security Administration ordered airlines to notify all passengers traveling to Venezuela that it can't vouch for security at the country's airports because its agents haven't been allowed in for inspections.

Chavez's aviation regulator said yesterday that flights from U.S. airlines to the country will be reduced starting Sept. 28. Separately, the U.S. Treasury Department today alleged that two Venezuelan intelligence officials and the country's former Interior Minister have assisted narcotics trafficking by the Revolutionary Armed Forces of Colombia, or FARC.

Venezuela and the U.S. are unlikely to sever ties permanently, said Carrasquero.

``Trade between the two countries is gigantic,'' he said. ``Venezuela wouldn't have anywhere to put all the oil it sells the U.S. so quickly.''

To contact the reporters on this story: Jose Orozco in Caracas at jorozco8@bloomberg.net; Matthew Walter in Caracas at mwalter4@bloomberg.net.

Last Updated: September 12, 2008 10:44 EDT