Gas prices continue to climb by over 30 cents per gallon ever since the Obama administration imposed sanctions on Iran, which included cutting the U.S. off from Iranian oil.
The main causes for the increase in high gas prices are continued sabre rattling by the U.S. and Israel against Iran, the inability for the European Union to resolve its sovereign debt problems, and the continuing increase in the U.S. debt which weakens the U.S. dollar in relation to oil.
The increase in oil and gas prices is due to the fear that there will be a supply disruption in the oil markets if the U.S. or Israel attacks Iran. Iran is the second largest produce of crude oil in the world next to Saudi Arabia.
The U.S. imposed sanctions to cut off Iran's access to U.S. banks which are essential to the international buying and selling of Iran's oil. The U.S. was also able to convince countries in Europe to cut off Iran's access to banks, but the Europeans had delayed enforcing the sanctions until the summer because Europe did not want to threaten its fragile economy. Iran retaliated to the U.S. and European sanctions by cutting off oil exports to some European countries earlier than the summer.
The net result of the sanctions are higher gas prices for American and European consumers while Asian countries like China, are able to purchase oil from Iran at a lower rate because the Chinese are not sabre rattling or imposing sanctions against Iran.
But after creating the conditions for high gas prices early in the year, President Obama now touts an 'All of the Above' energy strategy which Obama discussed yesterday in Miami, Florida:
"You know there are no quick fixes to this problem. You know we can’t just drill our way to lower gas prices. If we’re going to take control of our energy future and can start avoiding these annual gas price spikes that happen every year -- when the economy starts getting better, world demand starts increasing, turmoil in the Middle East or some other parts of the world -- if we’re going to avoid being at the mercy of these world events, we’ve got to have a sustained, all-of-the-above strategy that develops every available source of American energy. Yes, oil and gas, but also wind and solar and nuclear and biofuels, and more."