Petrol prices: Will the world react?

Petrol prices: will the world react? Photo: Reuters

Tonight there's growing pressure for the release of strategic oil reserves to calm world oil markets, with reports that the White House is preparing for the move.

In may the G8 asked the international energy agency to closely monitor these oil price peaks. Oil is so vital to any economic recovery and can so easily tilt the balance towards entrenched recession. The mechanism exists for a co-ordinate effort to release emergency stocks and it is thought that in Britain, France and Germany there is growing support for that.

Running twin-track with the economic considerations there is politics to add to the already volatile mix. With an embargo on their exports - if prices rise - Iran could actually benefit by selling at higher prices in the markets it can exploit.

Will the USA release strategic oil reserves to calm world oil markets? Credit: Reuters

Again politics enters an already tricky international situation. In the UK a 3p a litre fuel duty rise is due in January.

Today I've been briefed that next Tuesday a major new campaign will be launched by the petrol trade, tax campaigners and others to lobby MPs. Thousands of petrol stations will begin to actively persuade customers to join a national online petition.

And they may find themselves knocking on an open door - the government know only too well that higher petrol prices are potentially fatal for recovery. Increases inject into the economy and are pumped around the system so rapidly.

More on this story