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Germany, France oppose emergency oil stocks release
March 20, 2012 / 2:57 PM / 6 years ago

Germany, France oppose emergency oil stocks release

PARIS/BERLIN (Reuters) - France and Germany oppose an emergency release of oil stockpiles, which they believe should be used to offset supply disruptions rather than tame oil prices, officials from both countries said on Tuesday.

Sources told Reuters last week that Britain has decided to cooperate with the United States in a bilateral agreement to release stocks, in an effort to prevent high fuel prices derailing economic growth.

“There is nothing planned here (in Germany),” a spokeswoman for the German Economy Ministry in Berlin said. “The oil reserves are meant to be there for physical bottleneck situations. There is not such a case at the moment.”

A French official with direct knowledge of the matter also told Reuters on Tuesday France had no plans to join any stocks release.

“There is a very strong reluctance (in France) to play that game,” the French source said.

“France has no desire to take part in operations that aim to tame prices,” the source said adding that France restricts stock releases to cope with supply disruptions.

Oil prices rose this month to $128 a barrel, only $20 short of their 2008 peaks, due to worries that international sanctions against major oil producer Iran could lead to severe supply disruptions.

The rally has become a major headache for politicians around the world including U.S. president Barack Obama aiming for re-election in November and facing public anger over soaring U.S. gasoline prices.

Fuel prices in France have also sky-rocketed in the past few months to record levels, prompting an intense debate between presidential candidates one month ahead of the national election.

But no candidates have so far evoked the possibility of releasing French strategic stocks to ease the pain on motorists.

A spokesman for the Italian Industry Ministry said Italy has not been approached so far on this issue.

“At the moment no request has been received by the government,” he said. He did not elaborate on how Italy might respond.

Previous stocks releases, the latest last year, have been coordinated by the 28-member Paris-based International Energy Agency (IEA) to meet its mandate to cover supply disruptions.

Libyan oil production was shut down for much of last year during a civil war.

Under the IEA rules, each member country is required to have minimum emergency stocks equivalent to 90 days of fuel consumption.

The IEA has so far said that oil consuming nations have no need to release stockpiles as they do not face a supply crunch.

Editing by Keiron Henderson

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