IEA, U.S. Lawmaker Call for OPEC Battle Plan
Source: Reuters, Timothy Gardner (6/8/11)
"Rep. Edward Markey asks Obama administration to tap strategic oil reserves."
Oil-consuming nations reacted with dismay to OPEC's failure to agree to increase output on Wednesday, with the IEA urging key members to hike production anyway and an influential U.S. lawmaker suggesting Washington may tap strategic stocks.
The quick response to an extraordinary breakdown in OPEC talks in Vienna underscored the deep unease within the industrialized world about the danger of +$100 oil prices to a fragile world economy and the increasingly politicized effort to find new ways to fight them.
Paris-based IEA, the West's energy watchdog, said in a statement that it was disappointed the Organization of the Petroleum Exporting Countries had failed to agree to boost output, but held out hope that supplies would rise anyway.
Saudi Arabia, which had pushed for a hike, has made clear it will pump more unilaterally.
"Of course what really matters is actual supply, which should move in line with seasonally rising demand, and we urge key producers to respond accordingly," the IEA said.
It also once again made oblique reference to the only real tool it has at its disposal to battle high prices—the 1.5 billion barrels of government-held oil inventories that it coordinates on behalf of its 28 members, a reserve meant to be used only in the event of an emergency outage.
"The IEA stands ready to work with its member governments and others to help ensure that markets are well supplied," the agency said in an email.
The call was quickly matched by a prominent U.S. lawmaker, Democrat Representative Edward Markey, who asked the Obama administration to tap America's strategic oil reserves and put more pressure on the oil cartel.