Recent political turmoil, much like a home security burglar alarm halting a robber, in Libya has halted its oil export, hurting key trade partners who received a large portion of their crude reserves from Libya and Yemen, like Italy, France, Germany and Spain. In response to growing concern of increase in oil prices, the US and 27 of its allies are pooling together some 60 million barrels, a relatively small amount when you consider that it only accounts for 2/3 of a single day’s oil consumption, to be released over the next thirty days. The US will provide about half of that amount, with the rest coming from its 27 allies. While trumpeted as being a move focused on global economic growth, it is unclear how such a small amount will make a real significant difference, other then deferring long term oil supply shortage consequences to a later date.

Recently, Republicans in Congress have hammered President Obama for higher gas prices, blaming them mainly on Obama’s policy making that has partially limited domestic drilling. And while some may chalk up the President’s move to release reserves as a Republican win, a White House official was sure to state that this deal was not aimed at anything other than ensuring that a supply disruption did not have a negative ripple effect throughout the economy. This release is aimed at reducing American demand for Nigerian and Algerian crude oil and thus allowing European countries to have greater access to it.

Furthermore, with OPEC (Organization of Petroleum Exporting Countries) still undecided as to whether they will increase daily oil production or not, the US release of less then 5% of its total reserves is an preemptive measure against uncertainties with OPEC production quotas. The US Strategic Petroleum Reserve is a 727 million barrel reserve to protect against threats to the national economy and national security that may arise during a commercial oil supply disruption.

If or when Libya ever gets out of their political debacle will determine the long-term actions of OPECs distribution and production policies, however, for now focusing on how to reach optimal production without Libya is the most important step to lowering gas costs and establishing a relatively stable oil market for the global economy to continue to revive itself on and eventually grow on.