G7 to discuss massive oil reserve release amid price jump to $120 - report
Kyiv • UNN
G7 finance ministers will discuss releasing up to 400 million barrels of oil due to shortages. Brent prices jumped to $120 due to the war in the region.
The G7 countries will discuss the joint release of emergency oil reserves, the Financial Times reports, writes UNN.
Details
G7 finance ministers plan to discuss a possible joint release of oil reserves on Monday, the Financial Times reports. This, as Bloomberg notes, comes as the war in the Middle East paralyzes oil supplies from the region and leads to rising prices, which have already jumped to $120 a barrel.
Ministers are reportedly scheduled to hold a conference call at 8:30 a.m. New York time, and any action will be coordinated with the International Energy Agency. Three G7 countries, including the United States, have expressed support for the strategy, the report said.
Coordinated drawdowns from strategic reserves have only occurred five times: twice in response to Russia's invasion of Ukraine in 2022. Prior to that, they were used to overcome supply disruptions in Libya, after Hurricane Katrina, and during the first Gulf War.
Brent crude oil prices rose to nearly $120 a barrel on Monday, compared to about $72 before the war, as the Strait of Hormuz remained effectively closed, hindering exports from Gulf producers. Several major drilling companies, including the United Arab Emirates and Iraq, have already been forced to cut production due to a lack of storage, while Saudi Arabia is rushing to reroute shipments to the Red Sea, Bloomberg writes.
News of potential production cuts helped to offset some of this price increase.
The FT quotes one person as saying that some US officials believe a joint release of 300 to 400 million barrels, or about 25-30% of the 1.2 billion barrels in reserve, would be appropriate.
Consumers worldwide are already feeling the effects of Middle East disruptions, with long queues forming at gas stations and a sharp rise in jet fuel prices, which is increasing the cost of air travel. Many Asian refineries, dependent on Middle Eastern oil, have been forced to lower operating rates as they try to find alternatives to supplies from the Persian Gulf.
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