G7 nations prepared to implement “essential measures” in response to a rise in global oil prices on Monday but stopped short of committing to release emergency reserves despite crude prices briefly above $119 a barrel as the US-Israeli war over Iran continued.
“We’re not there yet,” French Finance Minister Roland Lescure told reporters after hosting a teleconference of G7 finance ministers in Brussels.
A final statement after the meeting said the ministers would “continue to closely monitor the situation and developments in energy markets and meet as necessary to exchange information and coordinate within the G7 and with international partners”.
“We stand ready to take necessary steps, including supporting global energy supply such as stockpile release,” it added.
Oil prices hit their highest level since mid-2022 on Monday, with some major producers cutting output on fears of prolonged shipping disruptions and wary of an escalation of the conflict. However, after President Donald Trump told CBS News that the war was “pretty much” over, the market bounced back late in the day, with benchmarks falling below $90 a barrel.
Canadian Finance Minister Francois-Philippe Champagne told reporters in Ottawa that there would be “greater consultation,” including with G7 energy ministers, before any action was taken.
“It’s very volatile,” he said. “I mean, we’re all making sure that there will be enough stock, obviously, to meet the demand. As you know, there’s oil storage on the water, as they call it, there’s also talk of lifting the choke point in the Strait of Hormuz.
“But to reassure the markets, bring confidence and restore certainty means the G7 is committed to working together, as you say, monitoring the market, monitoring oil and energy stocks and making sure we are coordinated in our approach. That’s really the result this morning.”
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A G7 official told Reuters there was a “broad consensus” not to release reserves at this stage. “It’s not that anyone is against it, it’s just about time. More analysis is needed,” the official said, adding that the final decision will fall to the G7 leaders.
Lescure, who holds the G7 presidency this year, said there are currently no supply problems in Europe or the United States.
Western economies coordinate their strategic oil reserves through the Paris-based International Energy Agency (IEA), which was formed after the 1970s oil crisis.
“We stand ready to take the necessary steps, including supporting global energy supply, such as stockpile release,” the G7 finance ministers said in a joint statement.
European Economic Commissioner Valdis Dombrovskis said G7 finance ministers did not discuss the specific market conditions needed to trigger the release of strategic oil reserves, focusing only on a shared willingness to tap stocks if necessary.
Dombrovskis said further discussions among G7 energy ministers would take place on Tuesday on the response to rising oil prices.
German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni and Belgian Prime Minister Bart de Wever have invited a group of European leaders to discuss competitiveness, including the issue of energy prices, in a video conference on Tuesday.
2022 is the biggest collective release
Japanese Finance Minister Satsuki Katayama said IEA Director Fatih Birol had urged the release of reserves. That country has the largest oil reserves in the world.
IEA member countries are net oil importers who are required to keep at least 90 days worth of oil imports in stock.
In 2022 the IEA organized the largest collective release in its history, with members freeing more than 180 million barrels of oil following Russia’s invasion of Ukraine.
IEA members hold more than 1.2 billion barrels of public emergency oil stocks and another 600 million barrels of industry stocks held under government obligation.
– with additional files from Global News
(tags to translate)Iran(T)G7(T)Oil Prices(T)Economy(T)World
