(AP Photo/Pablo Martinez Monsivais)
Long considered “sacred”, President Obama hinted today at the possibility that the U.S might delve into its strategic petroleum reserve. The emergency stockpile of oil contains 727 million barrels of petroleum.
The most recent indicators that the President will access the reserves came as he spoke to a group of personal finance writers in Washington.
“My general view has been that the strategic petroleum reserve is to be used when you don’t have just short term fluctuations in the market, but where you have a disruption,” Obama said. “Libya has taken 125 million barrels off the market. We’re examining broadly what that means in terms of the oil market.”
Interestingly, the U.S media downplayed the likely role that oil played in the western bombings in Libya. Could this latest statement by the President, perhaps, validate this concept?
The revolution in Libya froze the output of a country previously produced approx. 1.5 million barrels of oil per day. This translates to about 1.8% of the world’s oil supply. The production heavily stalled in late February, dipped to its lowest point to just .8%, and has yet to return to its former level.
The AP is reporting that “Oil is trading at levels that recall 2008, when months of record-high energy prices helped drag the economy into recession.” According to the American Auto Assocation, a gallon of gas now costs, on average, $3.75.
The U.S economy has clearly been damaged as a result of the democratic uprisings that are sweeping the Middle East, and the bureaucracy has been quite transparent about it. The transparency, however, simply hasn’t gotten through the media system.
For example, the chairman of the Energy and Natural Resources Committee, Senator Jeff Bingaman, has been saying that Libya’s petro value is immensely important. “Between the lost production in Libya, the crude oil dislocation associated with additional Saudi production, and the prospect of further turmoil in the region, we are now unquestionably facing a physical oil supply disruption that is at risk of getting worse before [it] gets better.”
The point of all of this is the following: the Libya bombings were oil bombings, and this shouldn’t be a secret. If we were interested in democracy from the start, we wouldn’t have strongly supported Ghadhafi and Mubarak for so long.