The decision was taken, despite the fact that the global demand projectile was showing signs of softening. And competition to sell was seen intensifying among producers.

When Saudi Arabia moved to boost output to cool prices, analysts felt any increase in Saudi supplies would flow eastward to feed rapid Asian economic expansion.

Yet that did not turn out to be that simple.

There now seems to be considerable challenges to the assumption.

Recent reports indicate that with Russia taking an expanding share of the world’s fastest growing market by pumping more oil into the region, there were not too many takers for the additional Saudi crude in the target region.

Russian supply to northeast Asia has grown almost five folds since 2008 — as crude began flowing through Russia’s East Siberia-Pacific Ocean (ESPO) pipeline.

The growing Russian exports to the region and the emergency release of oil stocks by Asian members of the IEA, Japan and South Korea, two of the region’s top consuming nations, added even more oil to the markets.

With so much crude on offer, refiners were seen reluctant to sign up to buy more from Saudi Arabia, reports now confirm.

It seems the oil pumped through the ESPO pipeline has changed the game in Asia, previously almost completely captive to Middle East sellers.

Russia sells 300,000 barrels per day to China, while another 600,000 barrels a day can be shipped to the Pacific and on to the Americas and even Europe.

Russia is pumping ESPO crude directly to China through a new pipeline section that opened this year, obviating the need for some imports from Saudi Arabia.

In addition, rising exports of east Siberian oil through the Russian Pacific port of Kozmino have gained acceptance among refiners in three continents.

Consequently, the prospects of Saudi Arabia raising its output to 10 million bpd in July appeared to have dimmed. Demand is simply not there.

Saudi Arabia may not increase crude oil output to 10 million barrels a day in July as it intended, as the IEA's planned stockpile release of 60 million barrels will keep the market “well supplied” during the month, many in the energy fraternity felt.

Analysts surveyed by Bloomberg now expect Saudi Arabia to increase output in July only to 9.5 million barrels a day from around 9 million in June to meet its international commitments and not 10 million bpd, as was said earlier.

In the immediate aftermath of the June 8 Vienna talks, a newspaper, citing senior OPEC officials, reported that the Kingdom planned to boost output to 10 million barrels a day in July, the highest level in more than two decades.

This may not be the case now.

Barclays Plc analysts, led by Paul Horsnell, also underlined that the use of strategic petroleum reserves, particularly when Saudi Arabia has restated its commitment to supply customers with the crude they need, may result in fewer oil exports from Saudi Arabia in the coming months.

In the meantime, the IEA also underlined it could repeat its decision to release more from the strategic reserves next month.

Nobuo Tanaka, director of the IEA, told a Financial Times energy conference last Tuesday that the oil market would be reassessed at the end of the agreed period for the current release of two million barrels a day.

Asked whether the IEA’s board could decide again to draw on reserves, Tanaka said: “It’s possible, if we need to.”

He clarified: Our current decision is: Let’s do it for 30 days and see how the situation goes.”

This prospect is going to tamper with markets further – one could easily underline.

And in the meantime, while the consumer body was making all the noises, eyes remained focused on Riyadh, for its reaction was vital to the markets and was keenly awaited.

Riyadh preferred a silence for the first few days.

The only official reaction came after a meeting of the Supreme Petroleum Council last Monday.

Although the meeting did not make any direct reference to the IEA move, yet it emphasized on the “good” fundamentals of supply and demand, expressing concern about the oil market’s stability.

“The production capacity of OPEC is enough to meet current and future global demand,” the council underlined.

Apparently, there was an implicit indication in the message that the IEA intervention was not required.

The meeting stressed “the Kingdom’s concern that the equilibrium and stability of the world market be maintained, as well as the reliability of supplies, in the interests of producers, consumers, and global economic growth,” noting, “the good state of the fundamentals of supply and demand, and commercial reserves.”

And indeed ever since the IEA moves, doves are under pressure — as was anticipated.

Despite the IEA insistence that the move was made to fill in the gap while additional supplies from Saudi Arabia reached the markets, it is being perceived differently within the OPEC circles.

At the EU-OPEC dialogue last Tuesday, EU officials while insisting that the talks between the two sides had been constructive, conceded both sides had taken a different view of the IEA reserves release.

“Obviously, there was a disagreement on this particular issue,” said Tamas Fellegi, president of the EU’s energy council and also Hungary’s development minister.

On the other hand OPEC Secretary General Abdullah El-Badri insisted, “I hope this practice will be stopped and stopped immediately,” adding, “we don’t see a good reason to release this quantity.”

Iran’s Acting Oil Minister Mohammad Aliabadi, the current OPEC president said it was an undue meddling that contradicted free-market principles.

“Why they are not abiding by those principles is really a big question for us. We believe that prices should be set by the market itself,” Aliabadi said.

Analysts are getting perturbed. BP Chief Economist Christof Ruehl says the single biggest risk for the oil market this year was “a war of attrition between OPEC and the IEA and that it goes on for a long time.” It could be a risk to both the upside and downside, he said, depending on the extent of both sides’ response.

And with hints that IEA was evaluating the possibility of releasing similar quantities from its strategic reserves next month too, if indeed "conditions warrant," the situation may indeed worsen.

The emerging perception gap between the ‘haves’ and the "have-nots" of the energy world is a definite deviation from the otherwise constructive atmosphere of the recent past.

This could be disastrous in the longer run.

Doves need to take control and at least a more assertive role in delineating the global energy dynamics in the current geopolitical scenario.

The widening perception gap is disastrous for the very future of this crude driven civilization of ours.