As the Middle East war continues to cast a shadow over energy supplies, G-7 nations are considering to jointly release strategic oil reserves. According to a report by Financial Times, finance ministers of the Group of Seven are set to discuss a potential joint release of strategic emergency reserves, on Monday, in a bid to calm surging crude prices.The ministers will be holding a call at 8:30 am New York time, and any decision taken will be in coordination with the International Energy Agency, according to sources familiar with the matter. The agency said that till now, three G7 nations, including United States, have already expressed support for the approach.
Historically, coordinated drawdowns of strategic oil stockpiles 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, following Hurricane Katrina, and during the first Gulf War, Bloomberg reported.The crisis has sent Brent crude soaring to nearly $120 a barrel on Monday, up from roughly $72 before the outbreak of the conflict. Brent crude, the global benchmark, surged 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 per barrel before easing slightly, while Brent traded 27.54% higher at $118.22.The Strait of Hormuz remains effectively closed, trapping 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 scrambling to redirect shipments to the Red Sea.Reports of a potential coordinated release have helped temper some of the price gains. Financial Times cited a source saying that some US officials believe a joint release of 300 million to 400 million barrels, roughly 25–30% of the 1.2 billion barrels in reserve, would be appropriate.Consumers worldwide are already feeling the impact of the supply disruptions. Petrol stations are facing long queues, jet fuel prices are rising, and airfares are climbing. Many Asian refineries, dependent on Middle East oil, have been forced to reduce operating rates as they struggle to secure alternative supplies.
