checks out uranium centrifuges.
Sanctions haven't spurred an increases in world oil prices. Nor an increase in U.S. gasoline prices. And that has meant another victory for Obama barely more than three months ahead of an election in which, just a few months ago, Republicans figured higher prices would be a handy cudgel with which to whack the administration.
Gasoline prices peaked nationwide this year at $3.94 a gallon, fell steadily until July 1 when they hit $3.33, and have in the past month climbed back to today's $3.53. Last year at this time, gasoline averaged $3.70 a gallon. The highest ever, not adjusted for inflation, was in July 2008, when the gallon price nationwide hit $4.11. There are wide regional variations. While gasoline prices may continue to rise slowly for a week or two it's unlikely they will return to their April peak in more than a few local markets. After Labor Day, they will head down sharply, and undermine any utility they might have as a Republican talking point.
It could have turned out differently. Just the threat of extra sanctions on Iran helped send prices of crude soaring the first three months of the year. But extra output from Saudi Arabia and a slowing global economy have eased any upward pressure on prices.
Part of what's happening is due to a global economic slowdown that has lowered demand for oil. That cuts both ways. When the price goes up, it tends to stop consumer spending on other items. That weakens the economy and slows down hiring. When the price goes down because of lowered demand, consumers spend more on other things, and that spurs businesses to order more goods, which leads to more hiring. The balance point is an ever-moving target.
The pressure on Iran has been ratcheted up as a means to stop the nuclear development that Tehran's leaders say is solely for civilian uses but that many other nations, especially the United States and Israel, claim is a prelude to building nuclear weapons. Under the sanctions that began July 1, no buying, shipping, financing or insuring of Iranian crude is allowed.
Those prohibitions, write Anthony DiPaola and Isaac Arnsdorf, are now costing Iran $133 million in revenue a day. That's $48 billion a year, 10 percent of the Iranian economy. Crude oil exports have fallen by 1.2 million barrels a day. That's a drop of about one-third of Iran's daily production in June.
Whether this will have the desired political effect—force Iran to give up elements of its nuclear development program—is yet to be seen. But the economic impact is clearly not small. And that could help spur the Iranian domestic resistance that was crushed three years ago back into action the way economic issues initially sparked the "Arab spring." While previous sanctions did not push Tehran to do what the imposers desired, the latest round are the toughest yet.
This puts Romney in a bind. His oratory about the necessity of stopping Iran from getting the capability of building a nuclear weapon sounds tougher on the surface than Obama's. But nothing he has said suggests that he would actually go further than the current occupant of the White House. Obama has also said it is imperative to stop Iran from getting nuclear capability. The difference is that the president, in public at least, does not support a near-term military strike on Iran. For all the talk by the bomb-bomb-bomb neoconservative foreign-policy advisers on his campaign team, Mitt Romney's public statements on the matter are not clear on the matter of a near-term strike.
Bottom line: Neither the price of gasoline nor casual jingoism seems likely to give Romney much traction in the next few months beyond the cohort of Americans already predisposed to vote for him.