G8 pressures Iran, ensures oil supply

2012-05-19 21:09

kalahari.com

  • The Amateur
    A gripping read that reveals never before published details about the Obama administration's... Now R321.00
    buy now

Maryland - Leaders of the Group of Eight major economies raised the pressure on Iran on Saturday, signalling their readiness to tap into emergency oil stockpiles if tougher new sanctions on Tehran threaten to strain supplies.

In unusually blunt language, the G8 put the International Energy Agency - the West's energy advisor responsible for co-ordinating reserves - on standby for action.

It was the clearest sign yet that US President Barack Obama is winning support for tapping government-held oil stocks for the second time in two years.

"Looking ahead to the likelihood of further disruptions in oil sales and the expected increased demand over the coming months, we are monitoring the situation closely and stand ready to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied," the G8 said in a communiqué after a summit at Camp David.

The meeting came just days before the next round of Iran talks, to be held in Baghdad. Western countries suspect Iran's nuclear programme is aimed at making a nuclear bomb, a charge Tehran denies.

The UN nuclear chief is also due to fly to Tehran on Sunday in an apparent bid to secure a deal enabling his inspectors to probe suspicions of atomic bomb research.

Unmistakable message

"All of us are firmly committed to continuing with the approach of sanctions and pressure in combination with diplomatic discussions," Obama told reporters at the presidential retreat in Camp David.

"And our hope is that we can resolve this issue in a peaceful fashion that respects Iran's sovereignty and its rights in the international community, but also recognises its responsibilities," he said.

Although it made no explicit mention of oil reserves, the message was unmistakable, analysts said.

"The word 'likely' signals further disruptions in oil markets don't need to be earth-shattering to potentially prompt action" to tap oil reserves, said Michael Levi, an energy policy fellow at the Council on Foreign Relations in New York.

Speculation has been growing that Obama would use an energy session at the G8 to seek support to tap emergency oil reserves before a European Union embargo of Iranian crude takes effect in July and tough new US sanctions come into force in late June.

Exports have already fallen by more than a fifth this year.

Exposure to criticism

The meeting also showed that this month's slump in oil prices has not deterred Obama from moving toward tapping the Strategic Petroleum Reserve (SPR) again - an unprecedented second release for a US president.

That could expose him to criticism from Republicans that he is using a national security tool to win votes this November.

Michael Froman, a senior White House aide, told reporters that although oil prices have been declining in recent weeks, they remain high. He said the G8 was committed to keeping global oil markets well supplied, but did not discuss any specific trigger that would prompt action.

"Referring to the IEA is a way to talk about the SPR, without talking about the SPR," said Levi.

Britain, France and Japan have all signalled their readiness to press ahead with a release of reserves, according to sources and media reports, although the head of the IEA and the European Union's energy chief have both recently said they see no need to act.

Germany too has resisted tapping stockpiles again, after last year's release to make up for Libya's disruption.

The statement also made an indirect reference to concerns that big producers - principally Saudi Arabia - may be running short of extra capacity to boost output further, more reason to ready emergency stocks.

12% tumble

Saudi Oil Minister Ali al-Naimi says the kingdom is pumping around 10 million barrels per day (bpd), leaving it another 2.5 million bpd in reserve. But some analysts fear it could not sustain output at that peak level.

"There have been increasing disruptions in the supply of oil to the global market over the past several months, which pose a substantial risk to global economic growth," it said.

"In response, major producers have increased their output while drawing prudently on excess capacity."

Saudi officials have highlighted the 80 million barrels it is storing at home and abroad, measures meant to assure consumer nations that it can keep the world supplied with crude without the need to tap into emergency stocks.

Tapping the reserves is not a foregone conclusion. It is unclear yet whether Obama and allies would opt to wait and see if Iran's exports fall and prices spike, or move pre-emptively to head off a speculative panic that could drive US gasoline quickly above $4 a gallon (3.78 litres).

US crude oil has tumbled 12% this month, dropping to the lowest since before a November UN report on Iran's atomic programme which kindled global fears.

Read more on:    g8  |  barack obama  |  iran  |  iran nuclear programme
NEXT ON NEWS24X

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
44 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
 

ANCYL: Not voting would be blasphemy

Not voting in the forthcoming elections would be blasphemy, the ANCYL says in a statement commemorating the 50th anniversary of struggle icon Nelson Mandela's Rivonia trial speech.

 
 

Latest elections multimedia

Why Jack Parow wants you to vote on 7 May
The ad the SABC doesn't want to air
Elections 2014 in one cartoon
This year's election posters
 
Traffic
Lottery
 
  • Thursday Sir Lowry's Pass - 05:35 AM
    Road name: Old Sir Lowrys Pass Road
    TRAFFIC LIGHTS not working at Bezweni Road
  • Thursday Cape Town - 05:35 AM
    Road name: Buitengracht Street
    TRAFFIC LIGHTS not working at Waterkant Street
 
More traffic reports...
 

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Escape winter, head to Mauritius

Escape winter by spending 7 nights in Mauritius' tropical bliss from R13 215 per person sharing. Includes return flights, airport transfers and accommodation. Book now!

Kalahari.com - shop online today

Get many eggs in one basket!

Gaming bundles: 2 Super Hits games for R99, 3 Disney games for R99 and more + exclusive accessory bundles only available on kalahari.com. While stocks last. Shop now!

25% off bestselling books!

The Real Meal Revolution by Tim Noakes, Jeffrey Archer’s Be Careful What You Wish for, Man’s Search for Meaning by Victor E. Frank and many more titles. Shop now!

Up to 25% off electronics

Buy top electronics and save up to 25%. Such as kalahari.com’s 1# selling product the gobii eReader, Patriot X Porter flash drive, Asus Nexus 7” 3G tablet, Samsung Galaxy SIII, Lenovo G580 Notebook and many more. Shop now!

DStv HD PVR Decoder now R949

The DStv HD PVR Decoder has further revolutionised the television experience with lifelike viewing, sharper images, more vibrant colours and precision picture quality. Now R949, save R550. Offer valid while stocks last. Shop now!

Up to 30% off appliances & homeware

Save up to 30% on appliances and homeware this Easter! Offer valid while stocks last. Shop now.

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

BlackBerry Torch 9810

The BlackBerry Torch 9810 gives you the powerful combination of...

From R2820.00

I'm shopping for:

Horoscopes
Aquarius
Aquarius

There may be a break through, either through quiet contemplative time to connect to your deep side or forced on you by...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.