Strategic Oil Release Talk Mounts on Syria View
By Sri Jegarajah
There is growing speculation in global oil markets about the possible release of strategic stockpiles held by major industrialized consumers if military action against Syria triggers a surge in benchmark prices that threatens economic growth, strategists and traders told CNBC.
There will probably be a “short-lived spike in and around any U.S. military action, the timing of which is of course uncertain,” said Robin Mills, Head of Consulting at Manaar Energy Consulting & Project Management in Dubai. Still, it’s “worth watching any moves to ready an SPR/IEA stock release if Libyan disruptions continue, amid Syrian contingency plans,” added Mills, referring to the possible release of emergency oil from the U.S. Strategic Petroleum Reserve (SPR) coordinated by the International Energy Administration (IEA).
While forecasters appear divided over how severely regional oil production will be effected if Syria is targeted – and much does depend on Iran’s response and whether infrastructure in Iraq is hit if retaliation does occur – many believe policy planners in the U.S., Europe and oil-hungry Asia are making preparations for the worst-case scenario.
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