Chavez threatens to cut U.S. oil supply over vote

CARACAS (Reuters) - Venezuelan President Hugo Chavez threatened on Friday to halt the OPEC nation's oil sales to the United States, seeking to fire up his leftist supporters for a weekend referendum on expanding his powers.

The former soldier faces a tight vote on Sunday over proposed constitutional reforms that would allow him to stay in office for decades if he keeps winning elections.

Chavez has tried to rally his followers in the last days of the campaign with fiery rhetoric against opponents at home and abroad, and he warned at a huge rally on Friday that he would retaliate if the U.S. government interferes in the referendum.

"There will not be a single drop of oil for the United States," Chavez bellowed to hundreds of thousands of cheering supporters in downtown Caracas. "And if they want to come and take our oil they will face 100 years of war in Venezuela."

Most polls show a statistical tie for the "Yes" and "No" votes in Sunday's referendum.

Chavez's heavy spending on social programs has made him popular with Venezuela's poor majority but critics accuse him of seeking dictatorial powers and many moderate supporters are concerned that the reforms would give him too much power.

He portrays the vote as a plebiscite on his rule. "Whoever votes 'Yes' is voting for Chavez, and whoever votes 'No' is voting for George W. Bush, president of the United States," he said.

Chavez has for long accused Washington of backing a failed coup against his rule in 2002. Venezuela provides about 12 percent of U.S. oil imports and the leftist leader has often threatened to cut off the sales, but he has never done so.

Political analysts say he wants to convince supporters that Venezuela is again at risk and they need to rally around him by voting to expand his powers.

Chavez also threatened on Friday to cut ties with Spain and nationalize Spanish businesses in Venezuela if King Juan Carlos does not apologize for telling him to "shut up" at a recent summit in Chile.

NEW POWERS

The constitutional changes would allow Chavez to run for reelection indefinitely and give him direct control over foreign currency reserves swollen by oil sales.

They would also reduce Venezuela's official work day to six hours, expand social security benefits for informal workers like street vendors and allow the government to censor the media in a political "emergency".

It is the first vote Chavez faces without a clear lead in polls, and many Venezuelans are concerned that either the president or his opponents might refuse to accept the result.

Defeat could slow his declared socialist revolution but Chavez, a close ally of Cuba and Iran, has the advantage of a powerful get-out-the-vote machine that could tip the balance against a fractured opposition.

Caracas-based pollster Hinterlaces, which is aligned with the opposition, released a telephone survey on Friday that showed the "No" vote leading "Yes" by 13 percentage points. But most other pollsters show the race is still a tossup, and some give Chavez the lead, helped by strong support in rural areas.

Investors are increasingly nervous with Venezuelan bond prices slumping over the last month on concerns of possible political turbulence if the vote is close.

Opposition leaders have promised to stage protests if the Chavez-controlled electoral authority tampers with the vote, while government leaders say the opposition is preparing to cry fraud and launch violent demonstrations if the reform passes.

"They say they will only recognize the results if they win ... and they will take to the streets," Chavez shouted at the rally. "Fine. We'll see you in the streets then, we are not afraid."