G7 finance ministers are preparing to discuss the release of emergency oil reserves, according to reports, after the US-Israel war with Iran sent the price of crude oil above $100 (£75) for the first time since 2022.
Ministers will discuss the release of reserves in a call coordinated by the International Energy Agency (IEA), according to a report in the Financial Times.
The emergency meeting will take place at 8:30 a.m. New York time to discuss the impact of the Iran war, the Financial Times reported, citing unnamed people familiar with the matter.
There are three G7 countries, including the United States, that have so far expressed support for the release of emergency stockpiles, which are held by the 32 IEA member countries around the world.
The IEA maintains strategic oil reserves as part of an emergency system designed to help countries withstand oil price shocks. US officials believe a joint release in the range of 300 to 400 million barrels would be appropriate, which would supposedly represent 25% to 35% of the 1.2 billion barrels in reserve.
Oil prices rose and stock markets in Asia fell on Monday morning after continued violence in the Middle East fueled investor concerns about a supply crisis, pushing Brent crude to its highest level in four years and sparking a sell-off in the stock market.
At least five energy facilities in and around Tehran were hit by the attacks. Kuwait’s national oil company also announced a pre-emptive production cut amid retaliatory attacks by Iran.
The Strait of Hormuz, through which around a fifth of the world’s oil and gas tankers usually pass, has been closed for a week.
Brent crude, the international benchmark, rose as much as 29% to $119.50 a barrel in early trading on Monday. This dropped slightly after news of the G7 meeting, trading at $106.73, an increase of 15%.
While Donald Trump has promised to reduce inflation and energy costs, he said Sunday that rising oil prices were “a very small price to pay” for the United States “and for the world, security and peace,” and described it as a “short-term” consequence of the US-Israel war against Iran.
The Iranian regime warned that attacks between the United States and Israel risked driving up prices even further. A spokesman for the country’s Revolutionary Guard Corps said after the attacks on energy sites: “If you can tolerate oil at more than $200 a barrel, continue with this game.”
The emergency oil reserve system was created as part of the creation of the IEA in 1974 after the Arab oil embargo, which caused a jump in crude oil prices and a fuel crisis in the West.
Since its creation, the IEA has coordinated five collective stockpile releases, the last two in response to the Russian invasion of Ukraine.
