Connect to share and comment

US, France & UK consider tapping emergency oil reserves

France is considering joining a coordinated US-UK release of strategic oil stocks to push fuel prices lower, French ministers signalled Wednesday, as the threat of a confrontation between the west and Iran continues to raise concerns over supply.

France uk uk oil release 2012 03 28Enlarge
The threat of confrontation between the west and Iran over Tehran’s nuclear program, coupled with production problems in Africa, Latin America and the North Sea and rising demand in fuel-hungry Asian economies have raised concerns over supply and pushed prices up more than 16 percent since the beginning of 2012. (AFP/AFP/Getty Images)

LONDON, UK – The French government is in talks with the United States and Britain over the possible coordinated release of strategic oil stocks to stem high crude prices, French ministers said Wednesday, just weeks before the country’s presidential election.

London indicated earlier this month that it was prepared to cooperate with Washington in an emergency release to push fuel prices lower, in what is also an election year in the US, according to The Wall Street Journal.

Asked whether France would join the potential US-UK move following a weekly ministers’ meeting in Paris on Wednesday, French energy minister Eric Besson told reporters: “France is favorable to the suggestion,” The Financial Times reports.

French budget minister and government spokeswoman Valerie Pecresse also told journalists that France was working with the US and the UK to persuade the International Energy Agency (IEA), which coordinates emergency reserve releases in the case of severe supply disruption, to authorize the move, according to the Agence France Presse.

Speculation about the release of oil stocks helped push the cost of benchmark Brent crude down on Wednesday, with prices dropping $1.61 (1.3 percent) to $123.93 in afternoon trading in London.

More from GlobalPost: Oil prices rise as Iran exports drop

The threat of confrontation between the west and Iran over Tehran’s nuclear program, coupled with production problems in Africa, Latin America and the North Sea and rising demand in fuel-hungry Asian economies have raised concerns over supply and pushed prices up more than 16 percent since the beginning of 2012.

In the US, President Barack Obama, who is seeking a second term at November elections, faces public anger over soaring gasoline prices, while fuel prices in France have hit record levels, sparking an intense political debate ahead of the country’s own national elections next month, Reuters reports

More from GlobalPost: Promises, pitfalls await investors in Burma’s frontier economy

http://www.globalpost.com/dispatch/news/business-tech/global-economy/120328/us-france-uk-consider-tapping-emergency-oil-reserves