Chavez Summons Regional Allies to Back Libya Mediation Bid

Venezuelan President Hugo Chavez summoned an emergency meeting of his closest Latin American allies in a bid to mediate in the Libyan crisis that has divided the country and sent oil prices surging.

Chavez, who has compared Libyan leader Muammar Qaddafi to Latin American liberation hero Simon Bolivar, said yesterday that Qaddafi has agreed to mediation to resolve the conflict. Representatives from his regional bloc known as Alba, including foreign ministers from Bolivia, Ecuador and Cuba, are attending the meeting. The Arab League is studying Chavez’s proposal, Secretary-General Amr Moussa said yesterday.

“On the agenda is the constitution of an international humanitarian committee for the peace and union of the Libyan people, which has been well received by Colonel Qaddafi’s government,” Venezuela Foreign Minister Nicolas Maduro said in comments carried by state television. “There’s an open debate between the vision of the south, the vision of peace, and the warlike vision from NATO and the US that aims to impose itself on the world yet again, on the Arab peoples and, particularly, on the Libyan people.”

Conflicting Signals

Chavez’s plan would face stiff opposition from Libyan opposition groups and the U.S. and France, who have called on Qaddafi to step down from power after hundreds of people have died from battles between the military and anti-government protesters since Feb. 17.

Venezuela, the largest oil producer in South America, has strengthened ties with the OPEC nation since Chavez took power in 1999.

Maduro said Libyan Foreign Minister Moussa Koussa authorized Venezuela to select members of the commission, according to a letter dated yesterday that he read on state TV.

“We authorize you to take all necessary steps to select the members and coordinate their participation in the dialogue,” Maduro read from the letter.

Comments earlier this week by Qaddafi’s son Saif Al-Islam suggest Libya’s willingness to accept mediation is unclear.

“It’s like me going to broker a deal in the Amazon,” Saif Qaddafi told Sky News. “They’re our friends, we respect them, but they’re far away and have no idea about Libya.”

Oil Rise

In New York trading, crude rose to a 29-month high on Libyan unrest, and is heading for a third straight weekly advance.

Crude oil for April delivery increased $1.94, or 1.9 percent, to $103.85 a barrel at 1:49 p.m. on the New York Mercantile Exchange. Prices climbed as much as $2.18 to $104.09, the highest level since Sept. 29, 2008.

Chavez said yesterday that Qaddafi won’t leave power to seek asylum in Venezuela or Nicaragua and will die fighting if necessary while warning that a foreign invasion could push crude to $200 a barrel.

“If the civil war in Libya were to become an international war, oil could surpass $200 and that doesn’t benefit anyone in the world, that’s why Venezuela has made its proposal from the Alba,” he said.

U.S. State Department spokesman Philip J. Crowley said that if Qaddafi doesn’t respond “to the many calls across the international community for him to step down, it’s uncertain to me what an international commission is going to accomplish.”

Peru said it will support Chavez’s plan, even after breaking diplomatic ties with Libya on Feb. 23.

Chavez as a peace broker is unlikely to prove effective because of his alliance with Qaddafi and the dim prospects that Libyan rebel groups would negotiate with the strongman, Win Thin, head of emerging market strategy at Brown Brothers Harriman & Co. in New York said in a research note.

“Chavez is hardly an impartial third party in this conflict, as he has cozied up to Qaddafi over the years,” Thin said. “We would not expect opposition forces to be very open to any sort of Chavez intervention.”

To contact the reporters on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net; Jose Orozco in Caracas at jorozco8@bloomberg.net

To contact the editor responsible for this story: Bill Faries at wfaries@bloomberg.net

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