Today, a coalition of countries chose to drop missiles on Libya. Gadhafi is a madman who should be stopped. But I’m sure lots of you are wondering whether or not this “new war” will affect our reliance on Middle Eastern Oil.
For those of us in California, we do not rely on Middle Eastern oil. (SCHOCKER!) It comes from Alaska, Canada, and elsewhere. Europe relies heavily on oil from that region. They are going to be affected the most. So why are the prices so high? The price of oil right now is being dictated by the speculation that the turmoil in the region will affect world oil supply. This region is the largest producer in OPEC. That alone would affect the price.
Recently, while listening to the news that Mr. Obama was going to tap into the Strategic Petroleum Reserve to bring the price of oil down, I freaked. Why?? I said. There’s no need to do this yet. The news also said we only have 2 months of oil left in the SPR. I freaked some more. SO..I did research and talked to engineers and geologists that I know well. They reminded me that Bill Clinton also tapped the SPR when he was in office. While it may be an emotional response so they both could say, “we feel your pain (AMERICA) and we’re doing something about it,” in reality it has no real impact on the long range price. If Mr. Obama does what he says he wants to do then what they draw out would be a drop in the bucket of our national consumption. AND the oil will have to be replaced at a later date and at a higher price than when it was first purchased and placed underground. IT IS ALL POLITICAL. By the way, not to scare you, but there are only 30 days of oil storage in the SPR available at today’s consumption level.