France says it is ready to release some of its strategic oil reserves, possibly in a joint effort with the United States and Britain to curb the increase in crude oil prices and cut the cost of gasoline that motorists pay.
French Energy Minister Eric Besson said Wednesday that the U.S. had asked it to join in releasing some of its emergency stock of oil. He said France is discussing the plan with the International Energy Agency, the 28-nation coalition of industrialized nations that coordinates release of oil reserves. The U.S. said no decision has been made on whether to release any of the oil it controls.
Normally, oil reserves are only released when there is a severe oil supply disruption, which is not the case at the moment. But Western leaders say they are concerned that the increase in oil prices over the last several months could slow the global economic recovery.
The price of oil - which largely controls the cost of gasoline - has partly risen because of tensions over what Western powers say is the development of nuclear weaponry by oil-producing Iran. Emerging global economies are also using more oil, further boosting the price.
Consumer complaints about increased gasoline costs are weighing heavily on U.S. President Barack Obama and French President Nicolas Sarkozy, both of whom face tough re-election contests in the coming months. In the U.S., the cost of gasoline now averages more than $1 a liter. That price is still quite low by some international comparisons, but the highest ever in the U.S. for this time of year.
World oil prices fell Wednesday after France announced its intention to tap its strategic reserves and a U.S. report showed that its oil inventories are growing. The price for light sweet crude oil fell two percent on the New York market to about $105 a barrel.
But analysts say the current price is about $15 a barrel higher than it might be without the confrontation between West and Iran, which could lead to a disruption in Iran's oil exports. Some suggest that release of the emergency reserves could cut the price of oil to about $100 a barrel.
Some information for this report provided by AFP.