G7 will not release strategic oil reserves for now, stating that more assessment is still needed

On Monday, March 9, local time, a G7 official stated that G7 finance ministers largely agreed during their meeting: they will not release strategic oil reserves for now.

Earlier on Monday, G7 finance ministers held a phone call to discuss how to respond to the surge in oil prices triggered by the Iran conflict and the US and Israel.

The G7 includes the United States, Canada, Japan, Italy, the United Kingdom, Germany, and France.

In a statement, they said they are prepared to take “necessary measures” to support global energy supplies, including releasing oil stocks, but no decision has been made yet.

An official familiar with the G7 finance ministers’ discussions said, “There is a general consensus. It’s not that anyone opposes it, just a matter of timing. More analysis is still needed.”

The official also revealed that G7 energy ministers will hold a phone call on the same issue on Tuesday, and G7 leaders will discuss it later this week.

“I believe the final decision will be made by the leaders of each country,” the official said.

Strategic oil reserves are usually coordinated for release by the International Energy Agency (IEA). IEA Director Fatih Birol said that the situation in the Strait of Hormuz poses a “significant and increasing risk” to the oil market.

Historically, coordinated releases of strategic reserves have only occurred five times, two of which were during the Russia-Ukraine war. Before that, reserves were used during Libya supply disruptions, Hurricane Katrina, and the First Gulf War.

On Monday morning, Brent crude futures rose by as much as 30%, reaching $119.50 per barrel, the highest level since 2022. The reason was the escalation of the Iran conflict, which raised concerns in the market about the impact on global oil production and transportation.

Since the outbreak of the Iran conflict, the biggest concern in financial markets has been: how high will oil prices go, and how long will they stay elevated?

If oil prices remain high for a long time, ordinary households already troubled by high inflation will be under even greater pressure. Meanwhile, business costs will also rise significantly, including fuel, transportation of goods, and data center energy costs.

This could lead to the worst-case scenario for the global economy: stagflation, where economic growth stalls while inflation remains high.

Later on Sunday night, US President Trump attempted to ease these concerns, stating that the current high oil prices are temporary and worth the cost.

(Source: Cailian Press)