According to a Japanese news service, The Obama Administration will call for a release of strategic oil reserves (SPR) at the upcoming G8 summit. The expected request comes in advance of Europe’s July embargo on Iranian oil. Oil prices have declined in recent weeks, and the U.S. has seen increasing crude inventories. The Administration may be eager to assure minimal price disruptions as a result of the embargo, although the White House has downplayed reports of its support for a strategic oil release.

The International Energy Agency will decide if oil reserves should be tapped, and as recently as two weeks ago the Agency’s chief Maria van der Hoeven said she saw no need to tap supplies. Congressman Cory Gardner (R-CO) thinks any such move would be politically-motivated, saying that the President is “looking for a quick political fix [to high gasoline prices] by accessing the SPR, and he’s using any excuse to do that.”

Does the current oil market warrant a release of the SPR? Will Europe’s Iran embargo change the equation significantly? What might be the impacts beyond short-term price depression?