G7 finance ministers to discuss release of emergency oil reserve as crude reaches 4-year high amid West Asia conflict

Finance ministers from the G7 nations are set to discuss releasing emergency oil reserves at a meeting on Monday, according to a French government source, as reported by Reuters. This comes after crude prices surged past $100 a barrel for the first time since 2022 amid the ongoing US-Israel conflict with Iran.

The discussion will take place during a call organised by the International Energy Agency (IEA) at 6:00 PM IST. Officials will review how the escalating conflict is affecting global energy markets. At least three G7 countries, including the United States, have backed the idea of releasing emergency reserves, according to the report.

The IEA’s 32 member countries collectively hold strategic petroleum reserves designed to cushion economies during supply shocks or price spikes.

US officials are said to favour a coordinated release of around 300 to 400 million barrels of oil, which would amount to roughly 25% to 35% of the 1.2 billion barrels currently held in reserve, according to the Guardian.

Meanwhile, the European Union’s oil and gas supply coordination groups are also expected to meet this week to assess the conflict’s potential impact on the bloc’s energy supply. EU regulations require member states to maintain oil reserves equal to at least 90 days of consumption.

Energy markets have already reacted sharply to the conflict. The UK’s month-ahead gas price jumped 19% to 163 pence per therm on Monday, while the benchmark continental European contract rose 16% to €62 per megawatt hour.

Global oil prices also surged after continued strikes in the Middle East heightened fears of supply disruptions. Brent crude briefly climbed 29% to $119.50 a barrel during early trading before easing to about $106.73 following reports of the planned G7 talks.

Several energy facilities in and around Tehran were reportedly struck, while Kuwait’s national oil company announced a precautionary production cut amid Iran’s retaliatory actions.

The situation has been further complicated by the closure of the Strait of Hormuz, a crucial shipping route through which about 20% of the world’s oil and seaborne gas typically passes.

Despite the spike in prices, US President Donald Trump described the increase as a “very small price to pay” for what he called global security, adding that the impact would likely be short-term.

However, Iran warned that further escalation could push prices even higher. A spokesperson for the Revolutionary Guard Corps said that if countries could tolerate oil above $200 per barrel, they should “continue this game.”

The IEA’s emergency reserve system was created in 1974 following the Arab oil embargo, which triggered a severe energy crisis in Western countries. Since then, the agency has coordinated five collective releases of strategic reserves, including two in response to Russia’s invasion of Ukraine.