* Obama to seek G8 coordination to tap emergency
* Japan PM likely to support move; new French leader not
* IEA saw no need for reserves two weeks ago; German view
* Oil prices, down 16 pct since March, unmoved by new talk
(Adds comments from House Republicans)
WASHINGTON/PARIS, May 16 U.S. President Barack
Obama will seek support to tap emergency oil reserves from other
Group of Eight leaders at a summit this weekend before the
European Union's July embargo of Iranian crude, Kyodo news
agency reported on W edn esday.
The report suggests that a slide in oil prices to their
lowest in months has not halted U.S. efforts to use strategic
oil stockpiles to offset diminishing exports from Iran, which is
facing tough new sanctions on its oil industry.
The EU ban on imports comes into full force in July.
Kyodo said Japanese Prime Minister Yoshihiko Noda was
expected to support the call, which comes after several months
of discussion with allies including France and Britain. It is
the first indication that Japan may support the move, although
it is far from clear that skeptical nations like Germany have
been won over.
The White House declined comment on the report.
"General energy and climate change issues will be discussed
at the G8, as part of a larger focus on the economic issues. As
we have said repeatedly, all options remain on the table, but we
have no additional announcement to make," an administration
Separately, a French diplomatic source suggested that
newly-elected Socialist President Francois Hollande was also
prepared to go along with efforts to tap government-held
stockpiles, a change of stance from prior to the vote.
"The U.S. has an approach that we don't condemn," a
diplomatic source under the new presidency said, without
specifying what the U.S. approach was. "I think the discussions
will be easy and I don't expect any conflict on this question,"
he added ahead of a Friday meeting between Obama and Hollande.
In pursuing what would be an unprecedented second release of
the Strategic Petroleum Reserve (SPR) during his term, Obama may
be embarking on a risky political strategy. While he may help
head off a damaging spike in gasoline prices this summer, he
also risks attack from foes who argue that the SPR should be
reserved for use only in the event of a supply crisis.
"As an economic matter, the timing would require
explanation. As a foreign policy tool this would be a smart bomb
detonated in the heart of the Iranian economy with no physical
casualties," said David Goldwyn, who headed international energy
affairs at the State Department until early 2011. "You have to
love the move from a strategic perspective."
U.S. crude oil prices, which were already down
sharply when the news hit, edged still lower after the report.
Oil closed down 1.24 percent at $92.81 a barrel.
Oil traders have been on alert for a possible SPR release
since March, when news of discussion first surfaced amid signs
that Iran's oil exports were already starting to suffer. But
prices have fallen 16 percent since then, dropping to their
lowest in months on concerns about global economic growth.
Obama will raise the request during a discussion of energy
issues on Saturday at the meeting in Camp David, stressing the
need to stabilize oil prices and demonstrate solidarity in
putting more pressure on Iran, Kyodo reported, citing sources
close to Japan-U.S. ties that it didn't name.
Kyodo said that it was uncertain whether other G8 countries
would support Obama's call. Some, such as Germany, have tended
to resist using emergency stockpiles. The International Energy
Agency's chief Maria van der Hoeven said two weeks ago she saw
no need for tapping stocks as the market was well supplied.
A representative for the IEA, which coordinates energy
policy among the world's industrialized energy consumers, had no
comment on Wednesday.
Energy Commissioner Guenther Oettinger told Reuters earlier
on Wednesday that the European Commission is in close contact
with the United States and the IEA, but sees no immediate need
for any release of oil stocks.
Kyodo did not provide any details as to when such a release
could occur, but many analysts say Iran's exports could decline
sharply from July as tough new EU sanctions on oil shipments
come into full effect.
Last year, the IEA coordinated a global release of 60
million barrels in order to offset the war in Libya, which had
cut off the OPEC member's 1.2 million barrel per day of exports.
High gasoline prices remain a vulnerability for Obama ahead
of the Nov. 6 election, even though they have slipped for six
"He's looking for a quick political fix by accessing the
SPR, and he's using any excuse to do that," said Cory Gardner, a
Republican congressman from Colorado.
Gardner has introduced a bill that would require the
government to make more federal land available for drilling when
it taps the reserves.
Joe Barton, a veteran Republican lawmaker from Texas, said
the sanctions on Iran would not constitute a supply shortage
required by U.S. law to trigger a release of the reserves.
"He has to declare a national emergency to use it, and there
is no national emergency. Gasoline prices are up, but they're
going down," Barton said.
But Edward Markey, a Democratic congressman who has urged
the president to use the reserves, argued the move would be
"Going forward, the uncertainties arising from Iran's
nuclear ambitions, and the prospect of economic sanctions
against Tehran, justifies the president's coalition-building to
deploy oil reserves if needed to protect American drivers and
the world economy," Markey said in a statement.
(Reporting By Jonathan Leff, Timothy Gardner, Jeff Mason,
Roberta Rampton and Ayesha Rascoe in Washington, and Muriel
Boselli in Paris; Editing by Maureen Bavdek, David Gregorio,
M.D. Golan and Marguerita Choy)