* Petroleum Economist says U.S. convinced IEA to support
* Active talks in "recent weeks" to gather support
* Source says IEA concerned US, UK, France may move alone
* IEA chief says ready to act, but still believes
* Brent falls more than 1 pct as traders brace for action
By Michel Rose and Jonathan Leff
PARIS/NEW YORK, Aug 24 World oil consumers are
poised to tap into emergency oil inventories as soon as early
September after the International Energy Agency (IEA) dropped
its resistance to a U.S.-led plan, a source and an oil journal
said on Friday.
Just one week after its chief said there was no discussion
of possible emergency action, the IEA is now thought to have
agreed to the idea, the industry journal Petroleum Economist
reported on Friday, citing unnamed sources. The release could be
as large or larger than last year's 60 million barrel injection.
Responding to the report, IEA Executive Director Maria van
der Hoeven said the agency remained in close communication with
members and stood "prepared to act as necessary in response to a
physical disruption", avoiding the question of whether active
consideration of a reserve release was underway.
"However, as I said as recently as last week, at this time
the conditions that would warrant such a response by the IEA are
not present," she said in a statement.
But market fundamentals may not be the principal
consideration. While the disruption to Iran's exports may be
used as the excuse for action, U.S. officials are also keen to
temper rising prices that risk diminishing the impact of
financial sanctions on Tehran, Reuters reported last week,
While the IEA may not agree that the degree of supply
disruption has met the traditional measure of what would merit
emergency intervention, it is concerned that the United States,
France and Britain might act together to draw on stockpiles
without coordinating with the rest of the group, undermining its
credibility, according to Friday's media report, which was
echoed by the source.
"The U.S. is the main driver, the IEA sees no need for a
release. However, if major consumers such as the U.S., UK and
France want a release, the IEA is likely to step up and play a
role," said the source, who spoke on condition of anonymity.
"A release could be as early as September," the source said
News that consumer nations could be moving quickly toward
intervening in oil markets again weighed on prices, with
benchmark Brent crude falling $1.42 a barrel or 1.2
percent to close at $113.59 a barrel. The impact was muted by
oil platform closures as a storm heads toward the U.S. Gulf.
The Petroleum Economist said that the sharp decline in
Iran's oil exports this year would be used as a justification,
it reported in an article by editor Derek Brower, who also
writes for the Economist magazine.
"Whether it's self-inflicted or not, that's still a supply
disruption," the article quoted an unnamed official at a
government backing the release as saying. The Petroleum
Economist has been a well-regarded energy industry publication
for decades, but it is better known for its sophisticated
analysis and detailed maps than for breaking news.
WHITE HOUSE 'DUSTS OFF' PLANS
Talk of tapping into strategic stockpiles resurfaced last
week after Reuters reported that the White House has began
"dusting off" old plans for a possible release on fears that the
30 percent rise in oil prices since June could undermine the
effect of sanctions on Iran.
Analysts also have said the move could be timed to aid the
reelection effort for President Barack Obama, who has shown a
much more liberal approach to the country's Strategic Petroleum
Reserve (SPR), which has traditionally been reserved for major
supply disruptions to be used only as a last resort.
Last year the U.S. led a successful effort to convince the
IEA to tap into emergency supplies for the third time in its
The Petroleum Economist said the White House had spent
"recent weeks" seeking to persuade other countries to join the
plan, although officials in both the United States and other IEA
members told Reuters that no talks had been held by last week.
On Aug. 17, a source familiar with the matter said U.S.
officials were waiting to assess market conditions after the
Labor Day holiday on Sept. 3 before making a decision.
Plans do not appear to have reached an operational stage.
"I have received no official instruction telling me to stand
ready to release stocks and I'm unaware of such plans,"
Jean-Marc Tenneson, head of the steering committee of France's
strategic oil reserves agency (CPSSP), said on Friday.
He said a release would not be "reasonable" under current
circumstances, and would only be legitimate if, for example,
geopolitical tensions between Iran and Israel worsened
FRANCE, UK SUPPORT; SAUDI CONSULTED
The Petroleum Economist, part of the Euromoney group,
reported that France and Britain, both of which had signaled
their support for releasing reserves during an earlier round of
discussions in the spring, have endorsed the strategy.
It cited a diplomatic source as saying a British cabinet
official had discussed the move in Washington in recent days.
Last Friday, van der Hoeven said there was "no reason for a
release," and that no other IEA member was considering such a
measure. She said then that she had not been in contact with the
White House over possible intervention.
The Petroleum Economist article said that the IEA had
changed its stand after "lengthy talks with U.S. Department of
Energy officials in Washington earlier this month".
Officials in Japan and South Korea -- both of which have cut
back Iranian imports in order to avoid new U.S. sanctions --
also dismissed the need for emergency supplies last week. The
Petroleum Economist story said some IEA members were still
opposed, including Germany.
U.S. and British officials have consulted on the plan with
Saudi Arabia, according to the report. The kingdom believes that
there is no need for a release, but that the decision is up to
consumer countries, according to the story.
Oil consultancy Petroleum Policy Intelligence (PPI) said
this week that some consumer nations had discussed a possible
price trigger of $115 to $120 a barrel for taking action,
according to the journal's report.