Obama: Not Ready to Release Saved Oil to Lower Gas Prices

Thursday, 05 Apr 2012 01:05 PM

By Paul Scicchitano

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Saying that he was not prepared to make news, President Barack Obama on Wednesday told Newsmax and other online news organizations that he was not yet ready to announce the release of Strategic Petroleum Reserve to ease rising gasoline prices for struggling Americans.

“I don’t engage in a SPR release lightly,” the president declared in an impromptu appearance at the White House Personal Finance Online Summit on Wednesday.

“You have to factor in how effective is it going to be? How much participation will you get internationally? Are the major oil producers behind the release because they recognize that it’s in their long-term interests?” he explained at the second annual finance summit, which once again included Newsmax.com among the limited invitees along with Forbes.com, Kiplinger.com, Yahoo.Finance.com, and The Motley Fool.

“Those are all issues that we’re having to factor. So I will not be making any news today,” the president insisted.

France and Britain have been in talks with the United States on a possible release of strategic oil stocks to push fuel prices lower, according to French ministers, while British sources have also said that London was prepared to cooperate with Washington on a release of strategic oil stocks in a bid to prevent fuel prices from choking economic growth.

France's Energy Minister Eric Besson told journalists in March that the United States had asked France to join it in a possible emergency inventory release.

“As I’ve said publicly and repeatedly there are no silver bullets when it comes to gas prices,” Obama said on Wednesday.

Rising oil prices have become a major headache for politicians around the world, including Obama, as he faces increasing criticism from GOP presidential hopefuls and the American public at large.

Fuel prices in France have also hit record levels, prompting an intense debate between presidential candidates ahead of that country’s national election.

In neighboring Germany, the government has said that it did not believe the current situation justified a release of emergency inventory under German law, which says that emergency reserves can only be released in the case of "physical disruption to supplies. In our view there is no physical shortage at the moment," according to a government spokeswoman.

Oil reserve releases are normally coordinated by the IEA, representing 28 industrialized countries on energy policy. But the Paris-based IEA has authorized only three coordinated releases since it was founded in 1974, with the last one in June 2011 in response to lost Libyan production during its civil war.

Maria van der Hoeven, who heads the IEA, has said on several occasions that a coordinated IEA release is not warranted because there is no significant supply disruption on world oil markets.

Obama added on Wednesday that oil must be looked at in the context of a world commodity and that the United States is using less oil than when he took office.

“Our production levels are higher than they’ve been in eight years. We’re actually — because the economy has become more efficient, the auto industry in the United States has become more efficient — we’re actually using less oil than we have each year that I’ve been in office,” the president said.

He pointed to a combination of factors for the high gasoline prices, including the disappearance of more than a million barrels of oil per day from the world market “in bits and drabs” as well as higher insurance costs for oil tankers based on uncertainty in the Middle East.

“The issue is just the risk premium that boats are looking at because of a possible conflict in the Middle East — perceptions of a potential conflict with Iran,” Obama said, noting that officials are examining the situation carefully. “Those are the two main contributors.”

Crude oil prices have risen almost 16 percent since the start of the year.

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