As the average cost of petrol in the US edges ever closer to $4 a gallon, it is little wonder that Barack Obama has become increasingly nervous about oil prices. Expensive gasoline does not just infuriate American voters when they refill their cars at the pump. It may also risk undermining the economic recovery, which the Democrats hope will secure him a second term in the White House.
Among the options President Obama has on his table, one involves drawing on the US Strategic Petroleum Reserve. This reserve comprises roughly 700m barrels of oil buried in vast salt caverns along the coast of Texas and Louisiana. For all the pressures from fellow Democrats, President Obama would be better advised to leave the reserves undisturbed.
Oil from the SPR has been sold on only three occasions to contain spikes. The first two interventions occurred during the first Gulf war in 1991 and in the aftermath of Hurricane Katrina in 2005. These were, on balance, successful. But these crises were resolved in a reasonable time. Conversely, the release of 30m barrels ordered last summer to compensate for lost supply from Libya had only a short-term effect – and a relatively small one at that.