(March 10): The Group of Seven (G7) nations asked their main energy agency to prepare scenarios for the release of emergency oil stockpiles as the Middle East crisis roils markets.
The G7 wants to be ready to deploy oil reserves if needed, and tasked the International Energy Agency (IEA) with studying the volumes that could be released, French Finance Minister Roland Lescure told reporters in Paris on Tuesday. France holds the current G7 presidency.
The IEA, which oversees the use of OECD oil reserves, will discuss the process at a board meeting later in the day.
Oil prices soared to a four-year high of almost US$120 a barrel in London on Monday as flows through the Persian Gulf’s critical Strait of Hormuz remained essentially halted and major Middle East producers reduced output. Futures subsequently pulled back after US President Donald Trump said the war could end “very soon”, and were trading near US$91 a barrel on Tuesday.
IEA member governments will “assess the current security of supply and market conditions to inform a subsequent decision on whether to make emergency stocks of IEA countries available,” Fatih Birol, the agency’s executive director, said in a statement following the G7 ministers’ meeting.
“In oil markets, conditions have deteriorated in recent days,” he said, citing the near-halt of transit through Hormuz and the oil-output cuts in the region.
See also: UAE's biggest refinery stop production as precaution after drone attack — Bloomberg
Saudi Arabia, the United Arab Emirates (UAE) and Iraq are among producers deepening oil supply cuts, shaving about 6% off global output, as the region’s storage tanks fill up. The UAE also halted operations at its biggest refinery, Ruwais, on Tuesday as a precaution after a drone strike in the area.
The IEA has said its 32 member governments hold more than 1.2 billion barrels in emergency stockpiles, including the largest buffer, the US Strategic Petroleum Reserve. IEA countries hold a further 600 million barrels under government obligation.
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