Petroleum Economist reports that the International Energy Agency (IEA) has agreed to approve a release of supplies from the US Strategic Petroleum Reserve (SPR).  While the IEA has no sovereign authority to stop any US action, it does represent an important coalition of allies and its views have to be taken into consideration.  The IEA had long opposed such a release because it believes that unilateral actions undermine its ability to leverage market power vs. oil producers, so this is big news.

Various factors are causing a diminished supply in oil at the moment – in addition to ongoing factors in the Persian Gulf, there have been two major recent refinery fires, and Hurricane Isaac temporarily idled production in the Gulf of Mexico.  With gas prices rising to all time highs, the Obama Administration has considered the idea of releasing stocks from the SPR in order to ease supply concerns and lower prices.  With what appears to be an exceptionally close election looming any cynics believe that such an act would be primarily for political reasons.   However, there is very good reason to take such an action that has nothing to do with politics.  The fact of the matter is that US petroleum supply has been below the five year minimum range for two full months.  This is the first time in years that the US supply has dipped below the average range for an extended period.  While the US is not at war and there is no obvious national emergency, this situation is certainly an appropriate one for the use of the SPR.  Could such a release help the President in his re-election campaign?  Possibly.  But, could it offer relief to the nation mired in a tepid economy? Certainly.  It falls within fair use, IMO.