The price of oil soared to a 28-month high of $100 a barrel on Wednesday following escalating violence in Libya, a member country of OPEC.
Cramer, however, doesn't understand why the geopolitical events in Libya are affecting oil prices in the U.S. After all, the U.S. had imported just 51,000 barrels of oil per day from Libya, which is less than 1 percent of its total crude imports.
In addition, Cramer said the U.S. already has more than enough oil. The Strategic Petroleum Reserve, an emergency fuel store of oil maintained by the U.S. Department of Energy, is filled to the top. Cramer said West Texas Intermediate, a type of crude oil sourced in the U.S. and stored in Cushing, Okla., is also at capacity. Meanwhile, the largest deposit of oil found in 40 years was uncovered in North Dakota.
The U.S. has so much oil, noted CNBC's Erin Burnett, the country could soon start exporting it. She said it's important investors realize how much oil the U.S. has, so the Libyan conflict can be put in context, as it pertains to oil.
Cramer said Libyan leader Muammar Gaddafi is a "crazy man," though. For that reason, he worries continued unrest will only send oil prices higher, taking the price for a gallon of gasoline above $4. President Barack Obama shouldn't let that happen, Cramer said.
- Scenes of Civil Unrest in Libya
Not only should Obama demand Gaddafi step down, he should tell U.S. citizens he'll open the Strategic Petroleum Reserve, so gas won't go above $4 a gallon, Cramer said. Obama should also call for an investigation into why oil is priced on Brent crude in London instead of in the U.S. If Obama did that, Cramer thinks the market could be up 10 percent.
"The president is curiously absent on these particular issues," Cramer said. "What a great opportunity for him to come out."
In this market, Cramer said he's being cautious. He's not, however, afraid to buy good stocks that are down 10 to 15 percent. He would also buy gold at current levels.
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