Group of Seven finance ministers on Tuesday urged oil-producing countries to increase their output to meet demand, and warned that the group stands ready to sanction a release from strategic reserves to offset elevated oil prices that could hurt global growth.
"We stand ready to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied," the G7 said in a statement. "The current rise in oil prices reflects geopolitical concerns and certain supply disruptions. We encourage oil-producing countries to increase their output to meet demand."
Oil prices have pushed higher as Hurricane Isaac approached the U.S. coast, and the administration of President Barack Obama said separately on Tuesday that a release from the Strategic Petroleum Reserve was on the table.
Oil production in the U.S. Gulf of Mexico ground to a near halt and coastal refineries and ports curtailed operations on Tuesday as the storm approached. Oil traders geared up for supply disruptions with refineries closed or at reduced rates, and key import terminals shuttered.
"We remain vigilant of the risks to the global economy. In this context and mindful of the substantial risks posed by elevated oil prices, we are monitoring the situation in oil markets closely," the G7 said.
Finance ministers also noted that Saudi Arabia had committed at a G20 meeting of world leaders in Mexico earlier this year to use its spare oil production capacity to ensure adequate supply.
The October crude contract on the New York Mercantile Exchange rose 86 cents (U.S.) to $96.33 a barrel.