G-8 Pledges Support to Oil Market, Ramps Up Pressure on Iran

WASHINGTON - The Group of Eight leaders ramped up pressure on Iran today, pledging unprecedented support to the global oil supply, on the second day of the G-8 Summit at Camp David.

In a strongly worded statement, the G-8 said that increasing disruptions in the world oil supply "pose a substantial risk" to the shaky global economy.

For the first time, the G-8 announced it "stand[s] ready to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied." Implicit in the short statement is that it may not take dramatic disruptions to prompt the "appropriate action," though no specifics were given.

Michael Froman, deputy National Economic adviser called it a "key" and "unusual" statement from the powerful group.

"For the first time the G-8 has issued a statement like this indicating their coherence around going to the International Energy Agency if conditions warrant it. When we look at the disruption in supply of oil on the markets  over the last several months … as the Iranian sanctions are put in place," Froman said.

"It is sending a signal that the G8 stands ready to assure that the market is fully and adequately supplied during this critical time," he said.

Analysts say that today's statement could also be a signal that President Obama may tap into government-held oil stocks for the second time in as many years.  But it's still unclear, as Obama enters the home stretch before November's election, whether the administration would wait to see the full effect of the Iran oil sanctions or move ahead with the IEA in the lead to calm the markets.

Before the statement was released, Obama reiterated his commitment to increased pressure and sanctions if Tehran does not take a step back from its nuclear program.

"All of us are firmly committed to continuing with the approach of sanctions and pressure in combination with diplomatic discussions," Obama told reporters earlier today.

"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 United States, Britain, France, Germany, Russia and China are scheduled to meet with Iranian leaders Wednesday in Baghdad in the next round of nuclear negotiations.

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