IEA backs oil release decision

Lukoil's oil platform at the Astrakhansky Korabel shipyard in Russia.

NEW YORK (CNNMoney) -- The International Energy Agency mounted a defense of its decision to release 60 million barrels of oil in an emergency effort to ease a supply shortage.

The release, which included 30 million barrels from the United States' strategic petroleum reserve, has been criticized as an unnecessary and perhaps politically motivated decision.

But the IEA said, in a report released Wednesday, that the extra supply is already having the desired effect on international markets.

"We acknowledge that the impact of the collective action will only be truly evident in hindsight," the group said. "However, recognizing the flexibility and market liquidity it has already provided, we take a resolutely positive view so far."

After the IEA announced its decision to increase supply in June, the price of oil dropped, but quickly rebounded. Crude prices now sit at $97.03 a barrel, a few dollars above pre-announcement levels.

But lowering the price of oil was never the goal, the IEA said, arguing in its report that "it is blinkered to focus on specific price levels."

Any supply shortages were also mitigated in part by an increase in production by Saudi Arabia, which bumped production by 700,000 barrels per day to 9.7 million barrels per day in June.

And that number might climb even higher.

"Sources from the market and within the Kingdom earlier suggested that July production might rise to as much as 10 million barrels per day," the report said.

The increase in Saudi production helped offset OPEC's decision to keep production at current levels in the face of higher demand.

What is the SPR?

It was widely thought that OPEC would step in and make up the difference with part of its 4-million-barrel-day extra production capacity that's currently going untapped.

But the cartel made clear that wasn't going to happen, with at least six of its 12 members voting against a production increase.

The IEA also released demand estimates for next year. The group said worldwide demand is expected to increase by 1.6%, driven by growth in the developing world.