G7 urges higher oil output from oil producing countries

Finance ministers of the Group of Seven most industrialized nations urged oil-producing countries to raise output to ensure the market is well supplied, while warning that the West was ready to tap strategic oil reserves to offset rising prices that could hamper global growth.

Oil prices have surged as Western sanctions on Iran led to a loss of about 1 million barrels per day in crude exports from the OPEC member. Prices also rose as Hurricane Isaac approached the oil rich U.S. Gulf coast.

The administration of President Barack Obama said it was still open to possible release of oil from the Strategic Petroleum Reserve. Washington considered tapping emergency reserves in March but held off after oil prices declined. The head of the IEA, which represents 28 oil consuming countries, voiced her strongest opposition yet to a release of emergency oil supplies.

Oil production in the U.S. Gulf of Mexico was down more than 90 percent as Hurricane Isaac headed toward Louisiana as a Category 1 storm. Energy analysts do not anticipate extensive damage to oil and gas infrastructure if the storm stays in line with current projections. Still, any supply disruptions could heighten pressure for emergency oil supplies to be released.