But even then, the situation may not be as terrible as it sounds.
"Another reason perhaps why
Iran talks that we didn't see as much of a
reaction ... is because we've replaced Iranian oil already," says Phil Flynn, an analyst at PFGBest.
Flynn explains that OPEC nations have been producing more oil since 2008, U.S. supplies are at a 22-year high, Europe has built up supplies and strategic reserves and the United Arab Emirates has a pipeline that can avoid the Straits of Hormuz. Simply put, a lot of players have saved up in case of an Iran crisis.
"If we did see Iran shut the Straits of Hormuz, it would be like the first Persian Gulf War: we'd rally on the rumor, and then we'd crash on the fact," Flynn says.
Republicans have largely used the gas-prices argument against Obama so as to attack his energy policy -- specifically that he has prevented development of American oil resources and relies too heavily on foreign reserves.
Obama said in his State of the Union speech that U.S. oil production is at its highest level in eight years and that the country has relied on the least amount of foreign oil in the last 16 years, but opponents point to Obama's rejection of the Keystone oil pipeline measure that would have created jobs and had
sizable Democratic backing
Obama said in March he plans to order approval of a southern part of the Keystone pipeline -- a move that may signal his commitment to give the thumbs up to the whole operation after the elections, should he be re-elected, of course
Opponents of the president also fault Obama for higher gasoline prices by pointing to the rise in cost since he took office; per gallon, it's 101.6% higher now.
This argument though ignores the economic situation that unfolded at the end of 2008 and carried through 2009: A collapse in the global financial system that drove down the price of crude to $1.84 a gallon in Obama's first week in office from all-time highs at $4.11 in July 2008 near the end of George W. Bush's second term.
"It mirrors what happened in the crude market just because crude prices went from $147 to a low of $32 in December of 2008," says Smith. "Just this onset of the recessionary conditions: the markets crashed, everyone panicked and everything deteriorated, and the bottom fell out of the market. The same thing just happened to gasoline prices."
Sure we could be poised for much lower gas prices, but for that to come from a worst-case-scenario of contagion from Greece wouldn't be good news anywhere else but the pump. By that logic, low gas prices could spell disaster for the president in November.
-- Written by Joe Deaux in New York.
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