French Finance Minister Roland Lescure has said the Group of Seven (G7) nations are not yet ready to release emergency oil reserves despite the sharp surge in crude prices triggered by the Gulf conflict, reported Bloomberg News.
Speaking after discussions among major economies, Lescure said the bloc stands ready to act if needed to stabilise markets, but has not reached a point where coordinated action is necessary.
“We are not there yet,” Lescure said, referring to a potential joint release of strategic petroleum reserves.
The comments come as global oil markets remain on edge following the escalating conflict involving Iran, Israel and the United States, which has disrupted energy supply routes across the Gulf region.
Oil prices have surged above $100 per barrel after the conflict affected shipping through the Strait of Hormuz, one of the world’s most important oil transit routes that carries roughly 20% of global oil supply.
G7 MONITORING MARKETS
Despite the sharp rally in crude prices, Lescure said the G7 is closely monitoring developments in the energy market and is prepared to respond if the situation worsens.
Emergency oil reserves, also known as strategic petroleum reserves, are stockpiles maintained by major economies to help stabilise markets during supply disruptions.
A coordinated release of these reserves is considered an extraordinary measure and is usually used during major global energy crises.
RESERVE RELEASE DISCUSSED AMID PRICE SURGE
G7 finance ministers have been holding discussions on the possibility of releasing oil from these reserves as prices surged following the Iran war.
Such coordinated actions are typically organised through the International Energy Agency (IEA), which oversees emergency oil stockpiles held by member countries.
However, Lescure’s remarks suggest that while governments are preparing contingency plans, policymakers believe markets have not yet reached the stage where emergency reserves must be deployed.
MARKETS REMAIN VOLATILE
Oil prices have risen sharply since the conflict intensified in the Gulf, triggering volatility across global financial markets.
Prices briefly surged above $119 a barrel on Monday, the highest level since mid-2022, as some major producers reduced supplies amid fears that prolonged disruption to shipping routes could follow the US-Israeli war with Iran.
Speaking after an online meeting of G7 finance ministers, Lescure said governments currently saw no immediate supply shortages in either Europe or the United States.
“What we’ve agreed upon is to use any necessary tools if need be to stabilise the market, including the potential release of necessary stockpiles,” he told reporters in Brussels.
Western economies coordinate their strategic oil reserves through the Paris-based International Energy Agency, which was created after the 1970s oil crisis and also provides research and market data to member countries.
IEA CONSIDERS COORDINATED OIL STOCK RELEASE
IEA director Fatih Birol has urged consideration of releasing emergency reserves, according to Japanese Finance Minister Satsuki Katayama, whose country holds one of the world’s largest oil stockpiles.
IEA member countries, which are largely net oil importers, are required to maintain at least 90 days of oil import cover in strategic reserves.
The agency last coordinated its largest collective release in 2022, when more than 180 million barrels of oil were released to stabilise markets after Russia’s invasion of Ukraine.
IEA member states currently hold more than 1.2 billion barrels of public emergency oil stocks, while an additional 600 million barrels are held by industry under government obligations.
French President Emmanuel Macron also said energy ministers would discuss the situation on Tuesday on the sidelines of a nuclear summit in Paris as governments assess the impact of the Gulf conflict on global energy markets.
