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IEA, OPEC friction developing?

ABU DHABI, United Arab Emirates, July 25 (UPI) -- Friction is emerging between the IEA and OPEC over a decision to release oil from strategic petroleum reserves, a former oil director said from Abu Dhabi.

During its regular meeting in June, the Organization of the Petroleum Exporting Countries left production quotas set in 2008 in place. This was despite concerns that high energy prices would undermine global economic recovery.

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The International Energy Agency followed the OPEC decision by announcing its member states would release a combined 60 million barrels of crude oil from strategic reserves. The IEA said the release was needed because of tight market conditions brought on by the lack of production from war-torn Libya.

Walid Khadduri, a former director of international relations for the Organization of Arab Petroleum Exporting Countries, was quoted by news agency Emirates 24/7 as saying the IEA's justification didn't make sense.

He said there is friction between the IEA and OPEC because some members of OPEC had moved unilaterally to compensate for the loss of oil from Libya.

"Notwithstanding the real reason behind the move, most agree that the IEA is making efforts to reduce oil prices," he was quoted as saying.

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The IEA said it would've been tempted to intervene in February when the Libyan conflict erupted had its action been motivated by price control. Action from its members, the IEA said, was about providing short-term liquidity to the market.

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