WASHINGTON (JTA) — The G-8 forum of major industrial nations agreed 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 Saturday from Camp David, Md., the presidential retreat where President 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; these were steadied in part after the United States raised its profile in the Gulf and extracted pledges from major oil producers like Saudi Arabia to compensate should Iran cut off its own exports of crude.
U.S. officials said in briefings that the statement was aimed particularly at any Iranian threat to further disrupt oil markets as major sanctions set in place aimed at getting the Islamic Republic to comply with demands that it make transparent its suspected nuclear weapons program. The European Union is set to launch such sanctions next month.
"When we look at the disruption in supply of oil on the market over the last several months as the Iranian sanctions have been put into place, and look ahead to the end of June when both the EU sanctions and the U.S. sanctions are expected to be fully put into place, it’s sending a signal that the G-8 stands ready to ensure that the market is fully and adequately supplied during this critical time," Mike Froman, the deputy national security adviser for energy policy, said in a briefing.
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.
The G-8 at talks this week in Baghdad urged Iran to broaden negotiations with major powers that would "through a step-by-step approach based on reciprocity lead towards a comprehensive negotiated solution which restores international confidence that Iran’s nuclear program is exclusively peaceful." The U.S. officials in their briefings did not define "reciprocity."
Israel wants pressure on Iran to be maintained until it provably stops enriching uranium and dismantles an enrichment facility near Qom.
The Obama administration is pressing Israel not to go ahead with a strike on Iran while the United States leads efforts to end the suspected weapons program through sanctions and diplomacy.