Iran's OPEC Governor Mohammad Ali Khatibi has criticized the statement by the G8 that it stood ready to act to ensure oil markets are fully supplied, calling it "inappropriate" and designed to push down crude prices to serve U.S. President Barack Obama in his presidential race.

 

The leaders of the G8 group of the world's largest economies said they expected further disruptions to global oil supply once EU and U.S. sanctions against Iran are fully in force from July 1 and that they stood ready to ensure the oil market is fully supplied during "this critical time."

 

The statement did not include any specific mention of plans to release emergency stocks nor did it specify what would trigger such action.

 

But Mike Foreman, the U.S. Deputy National Security Advisor for International Economics, said the G8 countries were prepared to go to the International Energy Agency and to ask them to take appropriate action if conditions warranted it.

 

Khatibi said strategic stocks should only be used for emergencies. "If industrial countries want to use their strategic inventories under the current conditions, it is a move with political objectives, and [it is] inappropriate that they do so in order to interfere in the natural course of the market," Khatibi said.

 

"These strategic inventories are for emergencies or certain incidents ... I don't see any emergency in the oil market at the moment," he said.

 

"I think Americans want to hold oil and gasoline prices down so that the Democrats gain votes. Of course, if the market is balanced, this supply will result in surplus oil and the oversupply will decrease the prices even though it would be for a short period.” 

 

Khatibi also criticized sanctions against Tehran that target its oil exports.

 

"Ignoring the export capacity of such big exporter as Iran will not be good -- when they impose sanctions instead of solving investment problems and when they increase problems in the development of oil fields instead of removing them there will be definitely problems with oil production and supply," the Iranian official said.

 

The European Union ministers decided in January to ban the import of Iranian oil into the 27-block union from July 1. The sanctions imposed by the U.S. and its allies against Iran are aimed at curbing the Islamic republic's nuclear program.

 

When asked whether the G8 decision is to influence the upcoming nuclear talks between Iran and the world powers, Khatibi said: "I don't know. I don't [want to] enter this issue ... They should not mix oil with politics."
 

(Source: Platts)