WASHINGTON (Reuters) - President Barack Obama stands to win a bump in voter support for his decision to tap emergency oil reserves, but the gains from lower fuel prices run the risk of evaporating before next year’s election, political experts said.
The United States agreed on Thursday to release 30 million barrels of crude from the Strategic Petroleum Reserve as part of the Paris-based International Energy Agency’s plan to release 60 million barrels to protect the fragile global economy.
“What shocks me about this move is its timing,” Jeremy Mayer, an associate professor at the School of Public Policy at George Mason University, said about the administration’s decision to release oil.
“This is so far away from the presidential election (in November 2012) that I don’t think it makes political sense to do this.”
A slew of bad headlines on the economy may have pushed Obama to attempt to burst the speculative oil bubble. Republicans have blamed Obama’s environmental policies and his hopes that alternative fuels like ethanol and battery powered cars would cut oil imports for high oil prices.
The stubbornly high unemployment rate above 9 percent, fears of a double dip recession, and the weak housing market are plaguing voters just as Obama embarks on the reelection campaign.
A Reuters/Ipsos survey earlier this month showed 60 percent of Americans thought the country was on the wrong track, with high gasoline prices as one of the top reasons.
High gasoline prices act as a tax on drivers and unlike other economic indicators they are reminded of them every time they drive past a filling station.
“The administration is trying to put a stop to this cascade of negative news which is damaging Obama’s chances,” said Larry Sabato, political science professor at University of Virginia.
He said Obama may have been seeking to catch a ride on a fall in U.S. oil prices which had already dropped more than 15 percent from their peak at the start of May.
“This allows the Obama administration’s to claim credit for the fall in oil prices. They can say ‘we took dramatic action,'” Sabato said.
Dan Weiss, an energy and environment expert at the Center for American Progress, said lower fuel prices resulting from tapping the reserve could save Americans $95 million to $133 million per day. “This reduction will act like a tax cut for American families,” he said.
David Goldwyn, who headed international energy affairs at the U.S. State Department until early this year, said the Obama administration needed to act to stave off any additional economic damage from an anticipated supply shortage in coming months.
He said Saudi Arabia and other OPEC members have not been able to respond to demand from oil consumers.
“(The White House is) taking lead from IEA and anticipating what would have been a summer spike that would have further eroded recovery and trying to get that supply on the market in a timely fashion,” he said.
While prices may ease now, long term political gains for Obama may be elusive.
“Memories are really short,” said George Mason’s Mayer. “People could forget this move to tap the SPR, or it could have been worse than doing nothing.” He said if oil prices fall now, but go up again next summer, it may be hard to use the SPR again to control prices, and Republicans could hammer Obama for not controlling prices in the long term.
Reporting by Timothy Gardner, additional reporting by Ayesha Rascoe; editing by Sofina Mirza-Reid