Sale of U.S. strategic oil illegal?

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WASHINGTON, July 20 (UPI) -- An Alaskan lawmaker said sales of U.S. strategic petroleum reserves may have violated the law, arguing it is one more reason to tap into domestic resources.

The U.S. Energy Department announced in mid July that it awarded 28 contracts to 15 companies for the release of 30.64 million barrels of oil from the Strategic Petroleum Reserve. The SPR release was ordered by the International Energy Agency to offset the decline in crude oil production from war-torn Libya.

U.S. Sen. Lisa Murkowski, R-Alaska, said a sale of SPR to oil trading company Vitol might be illegal because of sanctions on companies that do business with Iran.

"From the beginning, the administration's decision to sell 30 million barrels of oil from our emergency stockpile appeared to be motivated by more politics than policy," Murkowski said in a statement. "Now it appears there may be legal questions related to the sale as well."

The IEA defended the release by saying it added more liquidity to a tightened oil market.

Murkowski said that even though Vitol swore off business with Iran because of tightened sanctions, it was an indication more access to domestic resources might be the answer to energy security.

"Instead of continuing to sell our emergency oil supplies to the highest bidder, regardless of who they are or what they intend to do with the oil, the administration should work with Congress to develop our national resources," she said.

Murkowski in June said she was pushing "aggressively" to remove federal obstacles to developing the National Petroleum Reserve-Alaska and offshore assets in the Beaufort and Chukchi seas.