The news that President Obama has authorized the release of 30 million barrels of oil from the gulf coast caverns that hold America’s Strategic Petroleum Reserve came in an unusual way. In the past, when a president has taken the extraordinary step of tapping the SPR, as it’s known, he has done so to maximum political advantage, hinting that he might make the dramatic move, leaking heated internal discussions and then cashing it by framing it in front of voters as a (usually futile) attempt to drive down soaring gas prices.
But this morning’s word of the release came first from the International Energy Agency, the Paris-based coalition of 28 countries that was founded during the 1973 oil crisis and tries to offset major disruptions in the oil market (that is, tries to be the anti-OPEC). The effect was to emphasize the global response to what the IEA says is the disruption in oil supplies caused by the conflict in Libya
In fact, “We largely drove the process,” says a senior administration official, “but it was important for the market to show that the response was coordinated.” Senior Treasury and other administration officials were involved from the start in trying to get other countries to make up the rest of the 60 million barrels that IEA will coordinate releasing, but the decision was made to let IEA go first for effect. It worked–driving down ICE Brent crude as much as 10% in morning trading.
The U.S. decision to go second also gave the normally not-so-puissant IEA a shot in the arm. In that sense it showed again Obama’s emerging use of Libya as an effort to strengthen international institutions by “leading from behind.” Obama has said since his emergence on the national scene that he believes America enhances its interests when it strengthens the ability of international institutions to shoulder responses to crises.
