G-7 energy ministers ready to take ‘all necessary measures’ on oil reserves
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The IEA proposed its largest ever release of oil reserves to counter soaring crude prices driven by the Middle East war, The Wall Street Journal reported on March 10.
PHOTO: BLOOMBERG
- G-7 energy ministers are prepared to act with the IEA to address rising oil prices due to the Middle East war, potentially using strategic reserves.
- France's Finance Minister Roland Lescure said alternatives to the Strait of Hormuz will be found if it cannot be reopened.
- The IEA has proposed a record release of oil reserves, surpassing the 2022 amount, to combat soaring prices, according to the Wall Street Journal.
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GENEVA – Energy ministers of the Group of Seven (G-7) advanced economies said on March 11 they stood ready to take “all necessary measures”, in coordination with the International Energy Agency (IEA), to tackle the rise in oil prices due to the Middle East war.
The statement was released as French President Emmanuel Macron, whose country holds the rotating G-7 presidency, was set to chair a video conference of G-7 leaders to discuss the economic consequences of the war in the Middle East.
On March 10, member states of the Paris-based IEA met for crisis talks to assess the security of supply and the potential release of emergency stocks as the Middle East war rocked the markets.
“In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves,” energy ministers of the G-7 said in a statement on March 11.
They said they were coordinating within the G-7, and with IEA member countries and beyond.
“We agreed to stand ready to take all necessary measures in coordination with IEA members,” the statement said. “G-7 members will carefully consider the recommendations issued during these discussions.”
Separately, French Finance Minister Roland Lescure said no decision had been taken “at this stage”.
“We need to send a very clear message, which is that, if we cannot reopen the Strait of Hormuz, we will replace it with other oil that will come from elsewhere and circulate around the world,” he said in a broadcast on BFMTV/RMC on March 11.
Oil reserves report
The Wall Street Journal reported on March 10, citing officials familiar with the matter, that the IEA has proposed its largest ever release of oil reserves to counter soaring crude prices driven by the war.
The release would exceed the 182 million barrels of oil that IEA member countries released in 2022, when Russia invaded Ukraine, the newspaper said.
The crude market has been hit by wild volatility since the United States and Israel began striking Iran at the end of February, with Tehran retaliating by attacking targets across the oil-rich Gulf and effectively shutting down the crucial Strait of Hormuz.
Mr Macron earlier this week spoke about the possibility of G-7 countries using their emergency oil reserves to counter any extreme rise in oil prices caused by the war.
G-7 finance ministers met on March 9 and G-7 energy ministers on March 10 to hold talks.
Asian equities extended gains on March 11, while oil stabilised after the Wall Street Journal report.
IEA member countries currently hold more than 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government mandates.
The IEA was created to coordinate responses to major supply disruptions after the 1973 oil crisis.
In order to ensure energy security, the IEA imposes on its members an obligation to hold emergency oil stocks equivalent to at least 90 days of net oil imports. AFP
