Oil prices approach $120, billion barrels of reserves to be released by G7: Analysis of the Strait of Hormuz crisis and market logic

On March 9, 2026, the global energy markets experienced one of the most turbulent trading days in recent years. Brent crude oil prices surged rapidly after the open, briefly reaching the psychological threshold of $120 per barrel, then sharply retreated due to a news event, with a daily fluctuation close to 20%. The direct trigger for this extreme volatility was the sudden escalation of the Hormuz Strait crisis over the weekend combined with the G7’s record-breaking intervention plan. When military conflicts threaten core energy infrastructure and the supply lifelines of traditional oil-producing nations are cut off, the G7 announced plans to jointly release up to 400 million barrels from strategic petroleum reserves. This is not just a numerical game but a severe stress test on the global energy security system. Amid the sharp shocks in traditional finance markets, commodity trading tools like Gate are becoming key bridges connecting geopolitical events with individual asset allocations.

Event Focus: G7 Plans to Release 400 Million Barrels, Oil Prices Respond and Fall

On March 9, 2026, the finance ministers of the G7 held an emergency meeting to discuss a coordinated emergency release of oil reserves managed by the International Energy Agency (IEA). This move aims to curb runaway oil prices caused by escalating conflicts in the Gulf region. According to informed sources, this intervention will be historic, with U.S. officials proposing to release between 300 and 400 million barrels of strategic oil reserves, accounting for approximately 25% to 30% of the 1.2 billion barrels held by IEA member countries. Following the announcement, oil prices that had previously soared due to supply fears quickly retreated, with WTI crude dropping from nearly $120 to around $102.

How Two Weeks of Conflict Triggered a $100+ Oil Price

The current energy crisis was sparked by U.S.-Israel military actions against Iran at the end of February. Within days, the conflict escalated from bilateral clashes to attacks on energy infrastructure across the Gulf region.

• February 28: U.S. and Israel launch strikes against Iranian targets; Iran vows retaliation.
• March 1: Iran retaliates on a large scale, banning ships from passing through the Strait of Hormuz, causing significant disruption to global energy transportation routes.
• March 2: The conflict enters a phase of “precision strikes” on energy infrastructure. Attacks target Saudi Ras Tanura refinery, UAE Fujeirah oil storage, and Qatar natural gas facilities. Oil exports from Iraq’s southern fields plummet from over 3.33 million barrels per day pre-conflict to 800,000 barrels.
• March 8-9: As shipping through the Strait of Hormuz remains paralyzed, market panic reaches a critical point. When trading resumes at the start of the new week, oil prices explode, with WTI and Brent futures approaching $120 per barrel, reaching new highs since 2022. The G7 immediately announces an emergency meeting to discuss responses.

Supply Gap of 450 Million Barrels vs. 400 Million Barrel Intervention Reserve

To understand the urgency and limitations of the G7 intervention, it’s essential to examine the supply gap data.

Strategic Importance of the Strait of Hormuz

• Oil flow: Handles approximately 19-21 million barrels of crude oil daily, accounting for 25-30% of global maritime oil trade.
• Natural gas flow: About 20% of the world’s liquefied natural gas (LNG) supply passes through this route.

Actual Scale of Supply Disruption

Monitoring indicates that oil exports through the Strait have dropped from a normal average of 16 million barrels per day to about 4 million barrels, less than a quarter of normal. HFI Research estimates that the disruption could reduce global crude inventories by approximately 450 million barrels by the end of March, a figure that even exceeds the G7’s proposed release scale [citation: reference content]. This means that even if the G7 releases all 400 million barrels from reserves, it would only cover about one month of the supply shortfall, not fundamentally resolve the problem.

Market Price Response

As of March 9, 2026, data from Gate shows WTI crude (XTIUSDT) at $102.63, with an 11.70% increase over 24 hours, trading between $91.55 and $118.77. Brent crude (XBRUSDT) is at $105.24, up 12.15% over 24 hours, with a daily range of $93.30 to $119.30.

Diverging Views: Panic Realists, Policy Hedges, and Macro Cautious

Market opinions on the recent oil price surge and G7 intervention vary across different perspectives.

Fact Check: Facility Damage or Transportation Stoppage?

In a highly fragmented information battlefield, it’s crucial to distinguish “physical facts” from “market perceptions.”

Regarding “facility damage”: early reports may lead to the misconception that Middle Eastern energy capacity has been devastatingly hit. However, closer inspection shows that the shutdown of Saudi Ras Tanura refinery is mainly a “precautionary measure,” and the fire at UAE Fujeirah was caused by intercepted debris and was quickly controlled. This suggests that current supply “interruptions” are largely due to proactive risk avoidance and transportation blockages, not permanent loss of core production capacity. This provides a logical basis for rapid recovery once tensions ease.

Regarding “full blockade”: Iran’s ban on ships passing is mainly a political statement. The current shipping stagnation is primarily caused by commercial insurers suspending coverage and shipowners voluntarily avoiding risks for safety reasons. This “voluntary slowdown” could recover faster than expected once military threats subside.

Macro Impact: From Inflation Transmission to Cross-Market Opportunities on Gate TradFi

The recent oil shock has significantly affected both crypto and traditional financial markets.

Macro Transmission: Realization of Stagflation Risks

Rising oil prices directly impact the fragile global economy. U.S. gasoline retail prices have risen to $3.45 per gallon, which alone could increase overall CPI by about 0.3-0.5 percentage points. Japan, as a major energy importer, saw the Nikkei drop over 2,892 points in a single day, a 5.20% decline. Market fears of simultaneous inflation and recession—stagflation—are intensifying.

Crypto Market Linkage: From Alternative to Resonance

Historically, cryptocurrencies have been viewed as “digital gold” to hedge fiat devaluation, but in extreme macro uncertainty, their correlation with risk assets is increasing. When traditional markets face liquidity tightening expectations due to rising oil prices, crypto markets also come under pressure. However, this highlights the unique value of Gate’s TradFi products: through perpetual contracts like XTIUSDT, traders can simultaneously position in crypto assets and crude oil within one account, enabling genuine cross-market asset allocation and risk hedging. When traditional oil futures markets are closed due to holidays or non-trading hours, Gate’s 24/7 trading mechanism offers an irreplaceable advantage for capturing sudden events like weekend escalations.

Three Scenarios for Oil Price Trajectory and Reserve Battles

Based on the current situation, there are three main potential developments:

Scenario 1: Short-term intervention succeeds

Hormuz Strait reopens within weeks, and oil-producing countries resume normal production. G7’s 400 million barrel release acts as “transitional liquidity,” successfully calming markets. Oil prices quickly fall back to pre-conflict levels (around $70-80). In this case, the reserve release creates new replenishment needs, supporting long-term contracts.

Scenario 2: Stalemate persists, prices remain high

Conflict prolongs, and Hormuz remains blocked for over a month. Despite the G7’s release, 400 million barrels cannot fully cover the estimated 450 million barrel inventory reduction. The supply gap persists, and prices hover between $100-120, intensifying global stagflation and complicating central bank policies.

Scenario 3: Escalation causes systemic damage

Fighting spreads to Iran or other key oil fields, causing capacity to become unrecoverable in the short term. In this case, the strategic reserves will be insufficient, and prices could spike above $150, triggering a global recession.

Conclusion

The release of 400 million barrels from strategic reserves is G7’s direct response to the current energy supply crisis, but its effect will be temporary. The long-term price trajectory still depends on how quickly tensions in the Strait of Hormuz subside. For traders, this volatility is not only a geopolitical risk lesson but also a practical test of asset allocation tools. In today’s environment of macro uncertainty, connecting the crypto world with traditional commodities via platforms like Gate may be a key step in seeking certainty amid turbulence.