Reserve oil stocks release?
March 28, 2012
French Energy Minister Eric Besson told reporters in Paris on Wednesday that the government was willing to tap its strategic oil reserves.
"It was the United States that requested this, and France greeted the idea favorably," Besson said after a routine meeting of cabinet ministers at the Elysee Palace. "We are now waiting for the opinion of the International Energy Agency."
Besson said a possible release of emergency oil stocks would be "a matter of weeks" rather than days. The measure would aim to push down spiraling oil prices on global markets which to no small extent have been the result of western sanctions against Iran over its nuclear program.
Crude oil hit the $128 (100-euro) mark per barrel this month, only $20 short of its 2008 all-time high. The oil price is up more than 15 percent since January.
Political considerations
The rally has become a major headache for western politicians, and most of all for US President Barack Obama, who is aiming for re-election in November and facing public anger over soaring gasoline prices and fears that fuel hikes might choke economic growth.
Fuel prices have also spiked to record levels in France, prompting an intense debate between presidential candidates one month ahead of the national election.
Against that background, France's announcement that it would agree to tap oil reserves has not surprised analysts. Paris is to join an already existing strategic alliance between the US and the UK.
Current global oil supply outages are running at more than a million barrels a day, providing justification for western nations to release their strategic reserves.
hg/gb (Reuters, AFP)