G7 to discuss emergency oil reserve release as Gulf war drives crude prices above $116: Report

Emergency meeting with IEA chief Fatih Birol comes as Brent crude jumps 24% and global markets react to supply fears triggered by the Gulf conflict.

• G7 to discuss coordinated oil reserve release amid price surge
• Oil prices jumped over 24 percent after Gulf conflict escalation
• Three G7 nations support releasing 400M barrels from reserves

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G7 finance ministers will discuss a possible coordinated release of emergency petroleum reserves during a call on Monday, as oil prices surge following the conflict in the Gulf, the Financial Times reported.

The ministers will hold the emergency discussion at 8.30am New York time alongside Fatih Birol, executive director of the International Energy Agency (IEA), according to people familiar with the situation, including a senior G7 official cited by the Financial Times. The talks will focus on the impact of the Iran war on global energy markets.

Three G7 countries, including the United States, have so far expressed support for the proposal to release oil from strategic reserves, the people familiar with the discussions told the Financial Times.

Officials cited by the newspaper said some US policymakers believe a coordinated release of about 300 million to 400 million barrels could be appropriate. That would represent roughly 25 to 30 percent of the 1.2 billion barrels currently held in strategic reserves by IEA member countries.

The potential intervention comes as crude prices spike following the escalation of hostilities in West Asia.

Brent crude, the international benchmark, rose 24 percent during Asian trading on Monday to $116.71 per barrel. West Texas Intermediate (WTI), the US benchmark, climbed 28 percent to $116.45.

The price surge has triggered volatility across financial markets. Stock markets across much of Asia fell on Monday, while US equity futures pointed to steep losses ahead of the Wall Street open, according to futures indices.

Rising fuel prices have also intensified political pressure in Washington. The average US petrol price rose to $3.45 per gallon by Sunday, up from $2.98 a week earlier, according to figures cited by the Financial Times. Prices are expected to climb further unless crude costs retreat.

US President Donald Trump addressed the oil price spike in a post on Truth Social on Sunday evening.

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump wrote. “ONLY FOOLS WOULD THINK DIFFERENTLY!”

According to the Financial Times, the surge in oil prices risks fuelling inflation globally and threatening economic growth if sustained.

Major crude-importing economies including China, India, South Korea, Japan, Germany, Italy and Spain are particularly exposed to price shocks because of their reliance on imported energy.

The emergency petroleum stockpiles were established as part of the creation of the IEA in 1974, following the Arab oil embargo that caused global fuel shortages and sharp price increases.

IEA members are required to maintain strategic reserves as part of a collective system designed to respond to severe disruptions in oil supply.

There have been five coordinated releases of emergency oil stocks by IEA member countries since the organisation was established. The most recent interventions occurred in 2022 after Russia’s invasion of Ukraine triggered a surge in energy prices.

Ahead of Monday’s meeting, the IEA held an emergency discussion last week to examine possible responses to the emerging supply crisis, according to the Financial Times.

A document prepared for that meeting stated that the IEA stood “ready to act to support the stability of oil markets”.

The confidential document cited by the newspaper noted that IEA member countries currently hold more than 1.24 billion barrels in public strategic stocks, in addition to roughly 600 million barrels held by industry that could also be mobilised if required.

Together, these reserves could cover nearly one month of total oil demand in IEA countries and more than 140 days of net imports, according to the document.

The United States and Japan together account for about 700 million barrels of the 1.24 billion barrels in public strategic reserves, the Financial Times reported.