Some experts believe that Obama is about to do something that no other president has ever done before. A growing number of people expect him to tap the Strategic Petroleum Reserve for a second time.
Last year the Obama administration announced that they would tap reserves on June 23 and final shipments were completed by the end of August. Oil prices rebounded in that time. However, things were a bit different last year:
"When we did the Libyan release, we had trouble getting the barrels scheduled -- if you know in advance that you want to schedule the barrels into the pipeline system, then you can do it," said Amy Jaffe, an energy policy expert at Rice University's Baker Institute in Houston.
"If after you lose the supply you have to spend a month doing the bidding and then you have to wait another six weeks before it gets through the refinery gates, then by the time the gasoline gets to the market -- you are talking about September and October and it's already too late."
The dynamics of the U.S. market have also shifted dramatically since last year, creating additional logistical hurdles that could delay or complicate deliveries from the Strategic Petroleum Reserve.
If Obama chooses not to break into the government reserves by the end of April, Reuters warns that gas prices will soar to $5 and beyond for the summer months ahead.
Still, most analysts aren't sold on the notion that this is the best option for the U.S. right now. When the reserves have been tapped in the past, the benefits have been minimal and very short lived as well.
From CNN:
They also say that the reserves are intended to cover events that produce actual shortages of gasoline at U.S. service stations, like what could happen in a full-blown conflict with Iran. Reserves were not designed to bring down prices in a jittery market.
"Only physical supply interruptions merit a draw," said Kevin Book, managing director of research at ClearView Energy Partners. Rising oil prices over the last couple of months are a sign that things with Iran could get really bad, and that "we shouldn't be burning our safety net in our gas tanks."
In the meantime, the The White House says it is considering any option to lower the spiking gas prices without releasing a time-frame as to when they will take action.
But the Obama administration is feeling the pressure. It could cost him the popular vote if he doesn't do something...
Global crude production is said to be down more than a million barrels per day because of the disruptions in Iran and others across the globe.
Currently, Brent crude oil is hovering around the $125 mark, meaning it's up at least 15 percent higher than it was last year.
But skeptics wonder if the administration is somehow skewing these numbers in order to get Obama's alternative energy plan to gain momentum. Or, so that when the administration does find an oil solution, Obama is heralded as a hero.
Keep in mind that the reserves are controlled completely by our president who has the power to sell or fill it at any time. Democrats have been writing letters to Mr. Obama in an attempt to convince him to release oil from the Strategic Petroleum Reserve to be sold to refiners.
Republicans disagree, saying we are not yet in a real state of emergency warranting such a drastic action. Additionally, it'll be more difficult for a Republican to take over the presidency if Americans are happy with lower gas prices.
Amidst the political bias, it's truly hard to say for sure what impact releasing oil from the SPR would have on the gas prices right now. In reality, it is likely that it will only offer little relief for a short time.
There are just so many uncertain factors contributing to this dilemma and almost all are so deeply convoluted within the battle amongst politicians in this election year...
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