People see it as the "nuclear option" in Chávez's escalating pissing match with the Americans. Chávez himself calls it his "strong oil card," and likes to threaten to use it. If things get out of hand, the story goes, Chávez could stop selling oil to the US and then the brown stuff would really hit the fan.
Problem is, the story is based on faulty economic reasoning. Oil is fungible. The only way Venezuela can cause a supply shock is by pulling out of the oil market altogether.
To see why, imagine Venezuela cuts off the US tomorrow and starts selling all its oil to China. (Not that the Chinese would go for this, but this is a thought experiment.) China would find itself buying an extra 2 million barrels per day. Logically, they would then buy 2 million fewer barrels per day from other suppliers. And the 2 million barrels the Chinese free up would eventually find their way to the US.
In the short run, this would mean some added costs as US and Chinese refineries are tweaked to process different crudes, and of course shipping would get more expensive for everyone involved. But, in the long run, world supply wouldn't change, so the Law of One Price would kick in. There's no reason to think the "strong oil card" would even push up prices, let alone cause some sort of crisis for the US.
So don't be fooled. The price of oil is set by the interaction of global supply and global demand. The only way Venezuela can cause a supply shock is by selling oil to no one. But this is the ultimate empty threat, because Chávez needs his oil revenue far more than the world needs our oil.