Mexico renews oil pact

The Associated Press

Mexico and Venezuela signed the renewal of a 24-year-old pact under which Latin America’s two top oil producers supply countries in Central America and the Caribbean.

Under the San Jose Accord, signed Aug. 3, Mexico and Venezuela each supply 80,000 barrels a day of crude oil and/or refined products to countries in the region.

The agreement involves favorable financial terms through a system of trade credits, but the oil is supplied at market prices.

At a summit earlier this year in Guadalajara, Mexico’s second largest city, President Vicente Fox told Central American leaders that his country can’t offer crude oil at discount prices, because it doesn’t give discounts to its own people.

The small economies of Central America and the Caribbean have been particularly hard hit by high oil prices, which this week are at record levels around US$44 a barrel.

The Aug. 3 annual extension was signed simultaneously by Fox in Mexico and Venezuelan President Hugo Chavez in his country.

Participating countries are Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Jamaica, Barbados, Haiti and the Dominican Republic.