As the Middle East war impacts energy supplies, the G-7 countries are considering jointly releasing strategic oil reserves. Group of Seven finance ministers are set to discuss on Monday a possible joint release of strategic emergency reserves to cool rising crude oil prices, according to a report in the Financial Times.According to sources familiar with the matter, ministers will hold talks at 8:30 a.m. New York time and any decisions will be taken in coordination with the International Energy Agency. So far, three G7 nations, including the United States, have already expressed support for the approach, the agency said.
Historically, coordinated withdrawals of strategic oil reserves have been carried out only five times, including twice in response to Russia’s invasion of Ukraine in 2022. Earlier releases were made to manage supply disruptions in Libya after Hurricane Katrina and during the first Gulf War, Bloomberg reported.The crisis has pushed Brent crude to nearly $120 a barrel on Monday, from around $72 before the outbreak of the conflict. Global benchmark Brent crude rose above $118 a barrel, while US West Texas Intermediate (WTI) followed a similar path, jumping nearly 30% from Friday’s close of $90.90. At 0230 GMT, WTI was up 30.04% at $118.21 a barrel before easing slightly, while Brent was trading 27.54% higher at $118.22.The Strait of Hormuz is effectively closed, stranding exports from Persian Gulf producers. Major oil producers including the United Arab Emirates and Iraq have already been forced to reduce output due to limited storage, while Saudi Arabia is struggling to redirect shipments into the Red Sea.Reports of a possible coordinated release have helped offset some of the price increases. The Financial Times, citing a source, said some US officials believe a combined release of 300 million to 400 million barrels, about 25-30% of the 1.2 billion barrels in reserves, would be appropriate.Consumers around the world are already feeling the impact of supply disruptions. Long queues are forming at petrol pumps, jet fuel prices are rising and air fares are rising. Many Asian refineries dependent on Middle East oil have been forced to reduce operating rates as they struggle to secure alternative supplies.
