Oil price surge impact energy market G7 has not yet reached consensus on joint release of strategic oil reserves

Amid the Iran war triggering severe fluctuations in the global energy market, the Group of Seven (G7) is closely monitoring the situation but has not yet reached a consensus on jointly releasing strategic oil reserves. France currently holds the rotating presidency of the G7. After an online meeting of G7 finance ministers, French Finance Minister Roland Lescure stated that all parties agreed to closely monitor the energy market situation and stand ready to take measures to stabilize the market when necessary, including using strategic oil reserves. However, they have not reached the stage of organizing a global joint release of reserves. Earlier reports had suggested that the G7 would discuss the potential release of strategic reserves to address the energy impact of the Iran conflict. Following the reports, international oil prices experienced significant fluctuations. Brent crude futures had surged by around 29% earlier on Monday, but the gains later narrowed. The current energy supply in the Middle East is facing severe disruptions. As the conflict escalates, oil tankers passing through the key energy transportation route of the Strait of Hormuz have almost come to a standstill. Major oil-producing countries such as Saudi Arabia, Kuwait, Iraq, and the UAE have been forced to cut production due to a shortage of oil tankers. These four countries collectively account for about 20% of global crude oil supply. During times of tension in the global energy market, the coordinated release of strategic oil reserves is typically organized by the International Energy Agency based in Paris. Historically, major economies have only carried out joint reserve releases five times, including two during the Russia-Ukraine conflict in 2022, as well as market turmoil due to disruptions in Libyan supply, Hurricane Katrina, and the First Gulf War. French President Macron stated that energy ministers from various countries will also hold a meeting in Paris on Tuesday to discuss the current energy market situation. This meeting will take place during a nuclear energy conference. Meanwhile, the effects of rising energy prices are already being felt globally. Some countries have seen long lines at gas stations, and the surge in aviation fuel prices has pushed up the cost of air travel. European Commissioner for Economic Affairs Valdis Dombrovskis stated that eurozone finance ministers will also discuss whether to jointly release oil reserves after international oil prices surpass $100 per barrel to increase market supply and ease the energy impact of the conflict.