France, US among those ready to tap oil reserves

Gasoline prices in an election year may be a factor

PARIS - Francois Fillon, prime minister of France, suggested Thursday that a deal was near among developed countries, including the United States, to tap strategic petroleum reserves to reduce gasoline prices.

There are good prospects for a deal, he said, adding his voice to those of other French officials who have said in recent days that the idea, which they attribute to the Obama administration, was under discussion among countries including the United States, Britain, and Japan.

“If we reach an accord with the other developed countries, we’ll draw on our stocks, push down the price for a limited time,’’ Fillon said. “It’s a way to face a crisis that is largely due to the situation today in Iran. But we shouldn’t expect any miracles.’’


The price of US crude oil futures for May delivery fell nearly 2 percent Thursday.

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Political concerns on both sides of the Atlantic may be a factor in the discussions. President Obama faces a reelection contest in November, and gasoline prices are at $4 a gallon or more in some states.

His French counterpart, President Nicolas Sarkozy, may be feeling even greater pressure, with gas prices in the Paris area at more than $10 a gallon and a first-round election test less than one month away.

Nations build oil stockpiles, like the Strategic Petroleum Reserve in the United States, to insure against major shocks to supply, such as those caused by wars or natural disasters. In June, the United States and its allies agreed to release 60 million barrels to replace lost Libyan production, helping to soften a spike in prices.

Oil prices have risen for a number of reasons, including sanctions against Iran in the standoff over its nuclear ambitions, reduced exports from Syria, Yemen, and South Sudan, and demand from India and China.


Central banks’ quantitative easing policies, which leave more dollars, yen, and euros chasing a finite quantity of the commodity, may also be contributing to the rise in prices.

Ali al-Naimi, oil minister of Saudi Arabia, the largest oil producer in the world, said Wednesday in an opinion piece in The Financial Times that the kingdom would do its utmost to hold prices down so as not to derail the global economic recovery.

“The use of strategic stocks is supposed to be the last bullet,’’ Olivier Jakob, an oil analyst at Petromatrix in Zug, Switzerland, wrote in a report Thursday. “If Western powers are seriously envisaging this, then it only shows the lack of commitment they have received from Saudi Arabia to replace the Iranian oil that is falling under the embargo.’’

Valerie Pecresse, France’s budget minister, sought on Wednesday to temper expectations of immediate action, saying the government was waiting for data from the International Energy Agency.

Its executive director, Maria van der Hoeven, said last week that any move to tap reserves - something normally coordinated by the IEA - would be up the countries involved.


But in an apparent softening of the IEA’s position, she said Thursday that the agency was concerned by the impact of high oil prices and “is closely monitoring market developments.’’