The explosion of a Transocean-operated oil rig last week has caused a massive oil spill in the Gulf of Mexico. The full extent of damages are obviously still unknown, but appear likely to surpass the Exxon Valdez as the worst oil spill in US history. The oil well remains unplugged and is leaking 42,000 gallons of oil per day.

In recent days, I’ve been asked what the impacts of this disaster will be on the price of oil and petroleum based goods. So let’s look at how this may play out in the short and long term.

Basically, the oil spill will have a minimal impact from a true supply and demand standpoint, as the amount of oil lost is infinitesimal compared to normal production. So, any moves in global oil prices blamed on this event are mostly based on rhetorical perception. Everyone knows that traders and markets are quick to raise prices during any type of real or perceived supply side challenge in the midst of uncertainty. With the summer months approaching, we’re due for the seasonal rise in gasoline prices at the pump, and this crisis could accelerate that increase. But no credible concerns about oil supply have been voiced by oil companies as of yet, and they are not likely to emerge unless the disaster escalates much further. In the short term, this tragedy will probably have a greater adverse impact on the supply of fish and other goods dependent on shipments through the Gulf of Mexico, than oil and its derivative products.

But the PR and political ramifications of the spill, which come at a time when public acceptance and political support for offshore drilling was rising, might be far more extensive. U.S. government policies around offshore drilling and developing new oil resources have been somewhat restrictive for years, and the most recent version of the Obama administration’s climate bill had finally included provisions for increased offshore drilling. The spill has the potential to ignite enough opposition to politically kill this idea, particularly if the news keeps getting worse on the environmental impact of this disaster. The anti-drilling sentiment is not isolated to environmentalists in the U.S., and this event will certainly embolden activists on a global basis to vilify fossil fuel development. Less supply development of oil resources over time could drastically impact prices when consumption resumes a steady growth trend after the economy recovers. So despite the horrible images we’ll see in the news in coming weeks, the long term economic impact of this disaster could be far greater than the short-term impact.

Bob Zieger is a Senior Category Manager for Plastics and Raw Materials in Ariba’s Global Sourcing Organization. Bob holds a MBA from Katz Graduate School of Business at the University of Pittsburgh and spent 11 years in the plastics industry in engineering and sourcing management roles. He is also a Certified Purchasing Manager (C.P.M.) as recognized by the Institute for Supply Management.