G-8 agrees on oil policies ahead of Iran sanctions

The G-8 forum of major industrial nations agreed to take action to keep the oil market stable, a signal to Iran that the international community is ready to absorb any retaliation for sanctions.

“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,” said the statement issued May 19 from Camp David, Md., the presidential retreat where President Barack Obama was hosting the G-8 summit. “In response, major producers have increased their output while drawing prudently on excess capacity.

“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 International Energy Agency is the body that coordinates energy policy for Western nations during crises.

The reference to “disruptions” apparently referred to threats over recent months by Iran to block the supply of oil through the Strait of Hormuz, a Persian Gulf transit point for much of the world’s oil supply. The threats drove up oil prices for a period.

In its summary statement, the G-8, which in addition to the United States includes Canada, Britain, France, Germany, Italy, Japan and Russia, expressed “grave concern” over Iran’s nuclear program and said the nations remained committed to a “dual track,” pressuring Iran through sanctions and using diplomatic channels. — jta