Gas prices have shot up 30 cents over the last month, and stand at $3.71 a barrel gallon nationwide, the highest level since mid-May. Rising oil prices and a refinery fire in northern California have caused most of the price increase, but some of this is also due to the possibility of an Israeli strike on Iranian nuclear facilities disrupting supply lines for oil from the Persian Gulf.

It has gotten worrisome enough that the Obama Administration floated the possibility of opening the Strategic Petroleum Reserves:

The White House is “dusting off old plans” for a potential release of oil reserves to dampen rising gasoline prices and prevent high energy costs from undermining the success of Iran sanctions, a source with knowledge of the situation said on Thursday.

U.S. officials will monitor market conditions over the coming weeks, watching whether gasoline prices fall after the September 3 Labor Day holiday, as they historically do, the source said.

It was too early to say how big a drawdown would be from the U.S. Strategic Petroleum Reserve and, potentially, other international reserves if a decision to proceed was taken, the source said.

The last time the Administration considered an SPR release, back in the spring, prices eventually dropped and they shelved the plans. The US did drawdown on reserves a year ago, during the Libyan civil war, and that had the effect of bringing down crude oil prices, but only for about a week.

For some reason, the impact on Iran sanctions is seen as a roadblock to opening the reserves. The theory seems to be that if relief on gas prices also means that less children in Iran might starve, well, we just can’t have that.

One thing I think we can say for sure is that the Administration will not suspend the ethanol mandate as long as gas prices remain high. This would have the effect of stripping more supply and increasing prices, and you’re just not going to see an action like that before the election, no matter how controversial it is to continue to set aside corn for fuel in the middle of a drought and a corn shortage.

Actually, because corn prices are so high, corn-based ethanol production has dropped to a two-year low which could also have an impact on overall gas prices.

It’s probably best to wait and see until after Labor Day, when gas consumption and prices typically drop, to see whether the SPR will be needed.