THERE is nothing quite like $40 oil to turn merely silly politicians into total dissemblers. This weekend Gordon Brown, who takes a lot more out of motorists’ pockets than the Opec oil cartel can ever dream of doing, is using a G7 pre-summit meeting to demand that the producing nations step up output to ease the burden on motorists. Not to be outdone in the oil fantasy league, the producing nations are planning to raise the output quotas that they are already exceeding, even though only Kuwait and Saudi Arabia are in any position to step up production significantly.

Meanwhile, John Kerry, who only after prodding admitted to owning a gas-guzzling sports utility vehicle, is accusing President George Bush of keeping prices high by refusing to draw down, or at least stop topping up, the Strategic Petroleum Reserve (SPR).

Never mind that when Bill Clinton tried to use sales from the SPR to bring down petrol prices, he succeeded only to the tune of one cent a gallon. Or that the amount of oil going into the SPR amounts to a mere 0.2% of world supply — hardly enough to affect prices. Or that a good portion of the responsibility for high petrol prices rests with Democrats and their green allies who have made it virtually impossible to build refineries in America, and have limited the oil industry’s flexibility by requiring that different grades of petrol be used in different cities, depending on local air-quality requirements.

Bush isn’t making much more sense than his adversaries. He defends his decision to add 40m barrels to bring the SPR to its capacity of 700m barrels sometime next year by saying that the SPR exists solely to meet a supply disruption — as if such a disruption would not take the form of a sharp rise in prices. The question is not whether the SPR should be drawn on in response to price rises — it should, but only if prices rocket in a way that threatens the economic health and hence the security of the United States. The gradual rise to $40 definitely does not threaten the economy.

Meanwhile, as if to make certain that the Opec cartel doesn’t feel under any real pressure to step up output, Claude Mandil, head of the 26-nation International Energy Agency (IEA), has asked its members not to use their stockpiles, which match those of America, to bring prices down to the $22-$28 range informally agreed between producing and consuming nations at a summit meeting in 2000. Referring to his failure to persuade Opec to bring prices down, Mandil told the press:

“Our discussions with producers did not succeed, that is true. At the same time, we have never lost contact with them.” That’s all right, then.

But perhaps the top prize for dissembling goes to Saudi Arabia, the leader of the cartel whose members account for about 43% of America’s oil supply. The kingdom induced Opec to cut output just a few months ago, allegedly for fear of a price-busting market glut. Now it is urging members to raise the quotas they are already ignoring as they pump oil as fast as they can to profit from high prices. The Saudis say they could produce enough oil to bring prices down, and have informally promised Bush that they will do so. But they know that their high-sulphur oil is not of the type that Americn refineries can easily handle, and that even if they started loading tankers tomorrow those supplies would not reach the United States until too late to affect petrol prices at the height of the driving season.

Meanwhile, some of Bush’s advisers are worried that Venezuela’s Castro-admiring president, Hugo Chávez, might interrupt supplies to America. Chávez is desperate to divert attention from his failed economic policies, and may use the time-tested technique of creating an external enemy, in this case Uncle Sam.

Venezuela is America’s third-largest supplier of foreign oil, providing 12.7% of our imports (Canada was first with 17.8%, and Mexico second with 13.1% in the first two months of this year), and its oil is of the quality most suited to making petrol, so any stoppage would be a serious blow.

The president’s second nightmare relates to the heating season. The prices of heating oil and natural gas are likely to be at record levels, at least if not adjusted for inflation. If the weather turns cold before the election on November 2, the ardour of even the president’s fans might also cool. So the White House is hoping for a nice, pleasant Indian summer.

But most of all those on the president’s re-election team are hoping for a coherent long-term energy policy. They privately admit that the energy bill they are required to advocate is a costly nonsense, and will do virtually nothing to enhance domestic supplies of crude oil, which now meet only about 40% of American demand.

The solution to America’s dependence on foreign oil, and especially on oil from the increasingly threatened Saudi royal family, does not lie in anything the administration proposes. It lies, instead, in making imported oil more expensive, thereby discouraging demand for it and encouraging the development of alternative sources of supply and new technologies. But making imported oil still more expensive is not considered as great a vote winner as encouraging fantasies about the SPR (Democrats), pressing for more drilling in Alaska (Republicans), or relying on the Saudis to keep their word about prices (the IEA).

If Bush had the nerve to tax imports, motorists’ dollars would flow into America’s treasury rather than those of Opec. But this is just too sensible to be considered in an election year. 

• Irwin Stelzer is a business adviser and director of economic policy studies at the Hudson Institute