By Jeff Mason
CAMP DAVID, Maryland, May 19 (Reuters) – Leaders of the
Group of Eight major economies raised the pressure on Iran on
Saturday, committing to a common approach on its nuclear program
and indicating they would be ready to act together to lower oil
prices if necessary.
“All of us are firmly committed to continuing with the
approach of sanctions and pressure in combination with
diplomatic discussions,” U.S. President Barack Obama told
reporters at the G8 meeting at the presidential retreat in Camp
David.
“And our hope is that we can resolve this issue in a
peaceful fashion that respects Iran’s sovereignty and its rights
in the international community, but also recognizes its
responsibilities,” he said.
The Camp David summit comes days before the next round of
Iran talks, to be held in Baghdad. Western countries suspect
Iran’s nuclear program is aimed at making a nuclear bomb, a
charge Tehran denies. The U.N. nuclear chief is also due to fly
to Tehran on Sunday in an apparent bid to secure a deal enabling
his inspectors to probe suspicions of atomic bomb research.
Speculation has been growing that Obama would use an energy
session at the G8 to seek support to tap emergency oil reserves
before a European Union embargo of Iranian crude takes effect in
July and tough new U.S. sanctions come into force in late June.
Sources familiar with a draft communique said the leaders
agreed to call on the International Energy Agency – the agency
responsible for coordinating the industrialized world’s
emergency oil stocks – to take “appropriate action” if there are
further disruptions to the oil market in the coming months.
“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. In response, major
producers have increased their output while drawing prudently on
excess capacity,” the statement will say, according to the
sources.
“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,”
it says.
The statement makes no explicit mention of releasing
strategic oil reserves.
With oil prices already sliding, a move by Obama to tap the
Strategic Petroleum Reserve – alone or along with other
countries – could expose him to criticism that the emergency
reserve should only be touched in a supply crisis.
Even without a hard and fast commitment to intervene in the
oil market, the G8 statement will show that this month’s slump
in oil prices has not deterred Obama from moving toward tapping
the reserve again – an unprecedented second release for a U.S.
president.
Tapping the reserves is not a foregone conclusion. It is
unclear yet whether Obama and allies would opt to wait and see
if Iran’s exports fall and prices spike, or move preemptively to
head off a speculative panic that could drive U.S. gasoline
quickly above $4 a gallon.
U.S. crude oil has tumbled 12 percent this month,
dropping to the lowest since before a November U.N. report on
Iran’s atomic program which kindled global fears.
(Reporting by Jeff Mason; Writing by Claudia Parsons; Editing
by Vicki Allen)
