As the prices at the pump have increased of late, the blame game begins. Once again a nonpartisan policy issue has been drawn into the vitriolic campaign rhetoric but this is one issue that we cannot blame solely politicians nor look to them for a solution. Some PolicyMic contributors such as Bradley Blakeman and many on the right place the blame squarely on President Barack Obama’s shoulders. But Blakeman gives the president too much credit and overestimates his ability to affect the global oil market, either in a positive or negative fashion. We are beginning to hear the familiar chants of “drill baby drill” just like when prices spiked in 2008, but if you will recall what eventually brought prices down, it was not increased drilling but the collapse of the global economy.
The world oil market, of which the price of gasoline in based on, is exactly that, a world market. The main reason behind the increase in price is that for several years now there has been increasing demand, mostly from China and emerging economies and especially as U.S. demand has actually fallen, and not enough spare capacity. What this does is create the illusion of scarcity and this combined with tensions over the Iranian nuclear program and the potential closure of the Strait of Hormuz drive up prices, simple economic theory. Other PolicyMic contributors such as Mijin Cha have recognized these facts.
So in reality what can Obama do in the short term to relieve price pain? One way would be to reduce tensions with Iran. This would drop prices but cost him dearly politically by making him appear weak on foreign policy. Another would be to draw on the Strategic Petroleum Reserve and in an attempt to increase the illusion of spare capacity in world markets at least temporarily. Overall, though, there is not much he can do and one could make the argument that he is one of the biggest victims of high gas prices.
At the end of the day the president will make the shrewdly calculated decision that will balance his political interests to provide the most muscle to his re-election efforts. Most likely this will manifest in him down-playing the threat of military strikes against Iran (at least until November 7th) and a draw from the Strategic Petroleum Reserve right before the beginning of the peak driving season on Memorial Day.
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