By Andrew Cawthorne
CARACAS (Reuters) - President Hugo Chavez reacted with predictable fury at "imperialist" sanctions by Washington over Venezuela's ties with ally Iran -- but does not look ready to jeopardize his huge oil trade with the United States.
Venezuelan officials from Chavez down condemned the measures against state oil company PDVSA, announced by the U.S. government as punishment for two shipments to Iran of an oil blending component worth $50 million.
"This is an aggression against Venezuela and against OPEC," Energy Minister Rafael Ramirez said, likening the sanctions against his country with U.S. pressure on Iran over its nuclear policy and the war to topple Libya's Muammar Gaddafi.
Out of the public eye for once due to a knee injury, Chavez nevertheless popped up on Twitter to condemn the "new gringo aggression" and "imperialist government."
Beyond such rhetoric, however, pragmatism probably will again prevail on both sides, analysts say.
President Barack Obama's government wanted to send a firm signal to Venezuela, while avoiding further upset to oil prices or a cutoff in supplies from one of its top five suppliers.
So the sanctions, while showing disapproval of Chavez's ties with Tehran, were relatively soft in practice. They bar PDVSA -- but, crucially, not its U.S.-based CITGO subsidiary -- from U.S. contracts and financing. Oil sales are not affected.
"This was just a rap on the knuckles," analyst Angel Garcia Banchs said. "In practice, the company is not affected."
On the Venezuelan side, the sanctions give the socialist Chavez a pretext to rail against the United States for meddling with the nation's right to befriend whom it wants.
That could be useful for Chavez as he seeks to bolster a nationalist image in the run-up to a 2012 re-election bid and may help the government distract attention from domestic problems like power and other service failures.
PDVSA held a protest rally on Wednesday at its Caracas headquarters, with scores of red-clad workers shouting angry slogans and pledging loyalty to Chavez. "The empire will not dictate our oil policy," the company said in a statement.
Yet there is no way, analysts say, that Venezuela is about to cut off commercial ties with the nation that buys about 45 percent of its crude and thus helps keep the economy afloat, especially as it emerges from an 18-month recession.
"The deep mutual interdependence of the U.S. and Venezuela in the oil sector is clearly a constraint on both sides," the Eurasia Group consultancy said in a report, also predicting Venezuela would quietly desist from further sales to Iran.
Should that not happen, the United States has more cards to play, if it deems Venezuela again violates its Iran sanctions law. "Chavez will have a lot to lose if the Obama administration imposes further sanctions, either in terms of oil exports or debt issuance," Eurasia said.
For his part, Chavez has threatened to disrupt oil supplies to the United States during various of the many flare-ups since he came to power in 1999, but never carried out the threats.
Oil minister Ramirez hinted at possible Venezuelan action, saying it guaranteed supplies to its U.S. subsidiaries but would study the impact of the sanctions on its other clients.
Oil prices were unaffected by the sanctions, though Venezuela bonds suffered slightly.
Venezuela's 2027 global bond, one of the top five most internationally traded hard-currency emerging market bonds, fell on Wednesday by 0.6 percent in price after a 0.35 percent drop in the previous session.
PDVSA's popular 2027 bond edged more than 0.1 percent higher in price on Wednesday after closing about 1.2 percent lower on Tuesday.
Chavez's friendship with Iranian President Mahmoud Ahmadinejad -- as well as various other leaders out of favor with the United States -- is a source of pride for the Venezuelan in his avowed aim to create alternative axes of power.
Opponents, however, say he has a shameful record of befriending tyrants around the world. "PDVSA's shipments are only one example of Hugo Chavez's support for the terrorist-supporting Iranian regime," said U.S. Representative Connie Mack, a Republican, citing reports of military cooperation between the two nations.
(Additional reporting by Frank Jack Daniel, Eyanir Chinea, Mario Naranjo and Marianna Parraga in Caracas; Matthew Robinson and Walker Simon in New York; Editing by Frank Jack Daniel)