(March 9): The Group of Seven (G7) nations is “not there yet” in terms of organising a global release of emergency oil inventories in response to the Iran war, according to France, which holds the current presidency.
French Finance Minister Roland Lescure was speaking after a virtual meeting to discuss the impact of the Iran war on energy markets.
“We agreed on following the situation very closely, we are ready to take all necessary measures including using strategic reserves to stabilise the market,” he said after a virtual meeting of G7 finance ministers.
Brent oil futures pared a surge of as much as 29% earlier on Monday when it emerged that the G7 would discuss a possible release in their talks on the economic fallout from the conflict. Prices are soaring as producers across the Middle East are forced to cut output and the vital Strait of Hormuz chokepoint is all but halted to tankers.
Saudi Arabia, Kuwait, Iraq and the United Arab Emirates, who between them pump about 20% of the world’s oil, have lowered output because the effective closure of Hormuz means there are no longer enough tankers to export their barrels.
Stock releases are normally coordinated by the International Energy Agency in Paris.
French President Emmanuel Macron said earlier on Monday that energy ministers will also meet in Paris on Tuesday on the sidelines of a conference on nuclear power.
See also: Asia races to contain energy crunch as oil drives past US$100
Coordinated releases of strategic stockpiles have been carried out only five times before, including twice in response to Russia’s invasion of Ukraine in 2022. Before that, reserves were tapped following supply disruptions in Libya, Hurricane Katrina, and during the first Gulf War.
France chaired a virtual meeting with finance ministers from the group to discuss the economic consequences of war.
Consumers across the world are already feeling the impact of the disruptions in the Middle East, with long queues forming at filling stations, and a surge in jet-fuel prices pushing up the cost of air tickets.
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