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Rising oil prices a threat: G20

business Updated: Feb 27, 2012 21:52 IST

The world's leading economies said on Sunday they were "alert to the risks of higher oil prices" and discussed the impact that sanctions on Iran will have on crude supplies and global growth. Finance ministers and central bankers from the Group of 20 (G20) said that they welcomed a commitment from producer countries to ensure oil supplies.

Higher prices at the gas pump could undercut the US economic recovery, push Europe deeper into recession and stoke already-high inflation in many emerging economies.

Brent crude prices rose to a 10-month high of $125 a barrel on Friday as Europe and Asia cut back on buying Iranian oil and seek out supplies from elsewhere to enforce sanctions designed to curb Iran's nuclear ambitions.

Saudi Arabia, the world's top oil producer and a member of the G20, increased exports sharply in the past week and is offering extra supplies to its biggest customers.

"We were quite pleased to hear that some of the oil-producing countries, in particular Saudi Arabia has indicated its determination to contribute to rebalancing and mitigating of the risks but clearly we have to remain vigilant," said Christine Lagarde, managing director, International Monetary Fund.

Show us the money: G20 to Europe
Leading economies told Europe it must put up extra money to fight its debt crisis if it wants more help from the rest of the world, piling pressure on Germany to drop its opposition to a bigger European bailout fund.

Euro zone countries pledged to reassess next month the strength of their bailout fund. This would be "essential input" when it comes for the G20 countries to consider putting more money into the IMF's crisis war chest, G20 finance ministers said.

G20 hopeful US will rework Volcker rule
G20 finance officials expressed confidence that the US could water down one of the centerpieces of its banking reforms, which critics see as a risk to debt markets and banks.

Officials said they felt Washington was listening to their fears over the US Volcker rule, which is designed to curb banks' trading for their own profit. It exempts trade in US Treasuries, but not other countries' sovereign debt.