G7 urges oil supply boost, says ready to call for IEA action
London (Platts)--29Aug2012/704 am EDT/1104 GMT
Finance ministers from the Group of Seven major industrialized economies
late Tuesday voiced concern about high oil prices and called on oil-producing
countries to boost output.
In a short statement, the G7 ministers also hinted at the possibility of
calling on the International Energy Agency to tap emergency oil stockpiles to
ensure the market remains well supplied.
"We remain vigilant of the risks to the global economy. In this context
and mindful of the substantial risks posed by elevated oil prices, we are
monitoring the situation in oil markets closely," the finance ministers said
in the statement.
"The current rise in oil prices reflects geopolitical concerns and
certain supply disruptions. We encourage oil-producing countries to increase
their output to meet demand, while drawing prudently on excess capacity, and
welcome Saudi Arabia's commitment [at June's G-20 meeting] in Los Cabos to
mobilize, as necessary, existing spare capacity to ensure adequate supply,"
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"We stand ready to call upon the International Energy Agency to take
appropriate action to ensure that the market is fully and timely supplied,"
The G7 comprises Canada, France, Germany, Italy, Japan, the UK and the
Saudi Arabia, OPEC's biggest oil producer, has reaffirmed its commitment
this year to act with other countries and alone if necessary to ensure world
oil markets are adequately supplied.
Saudi Arabian oil output rose to around 10 million b/d in July,
according to a Platts survey, up from 9.8 million b/d at the start of this
The increase from Saudi Arabia and other OPEC members has helped offset
a decline in supply from Iran, which has seen its oil exports fall as
separate sanctions from the US and European Union have come into effect.
Iranian crude production was estimated by Platts at 2.9 million b/d in
July, down from 3.55 million b/d in December.
The IEA, which represents the world's leading developed economies
including all the G7 members, has the authority to order a release of oil
from emergency stocks in the event of a supply disruption.
Since it was founded in 1974, the IEA has only ordered a stock release
on three occasions, most recently in 2011 to help make up for the shortfall
in supply from Libya after the uprising against the country's former ruler
So far this year the IEA has repeatedly said it does not see a lack of
supply on world markets which would warrant a stock release.
Speaking shortly before the G7 statement was issued on Tuesday, White
House spokesman Jay Carney said that releasing oil from the US' Strategic
Petroleum Reserve is an option that "remains on the table" for the Obama
At the daily White House press briefing, Carney said that "for some time
now... all options are on the table, including that one [releasing oil]. But
we certainly have no announcements to make today."
Rumors of a potential SPR release have been circulating for several
weeks, with regular White House statements that it is an option for
The UK government, meanwhile, said Wednesday it is "clear that the oil
market is tight."
"The UK is an active member of the IEA, which continually monitors the
oil market. UK and other IEA members routinely discuss oil market issues...
we are watching developments carefully, but no decisions have been taken to
release stocks," the UK Department of Energy and Climate Change said in a
--Richard Swann, email@example.com
--Edited by Alisdair Bowles, firstname.lastname@example.org