U.S. national security has been forfeited to political expediency. The Strategic Petroleum Reserves (SPR) are maintained in order to be available in the event of a national emergency. Before this release the reserves were sufficient to protect us for just 59 days in the event of total disruption of imports. That hardly seems adequate for calmer times let alone the period of .of geo-instability we are seeing right now.
The price of crude oil is down 19% from its recent high. There is no upward price pressure. There is no world shortage. There is no interruption of supply. Expectations are for weakening demand, not an increase; the markets are telling us that. But now, when prices at the pump continue the decline that was already underway, the President will be in position to claim credit for lowering the price of gasoline and few people will be the wiser.
In reality, the impact will be minimal no matter what quantity he ultimately orders sold from the government supply into the market. Furthermore, it will have only a one shot effect. About 50% of U.S. oil consumption is imported. If perchance, 10% of the SPR is released it would be a one time injection of 3 days consumption or less than 1% of a year’s consumption.
It’s dumb acts like this that cause some to wonder if Obama does not have the weakening of America as one of his objectives. Sometimes it is not easy to decide whether he is incredibly dumb when it comes to economics or intentionally destructive.