Finance ministers of the G7 will convene on Monday to deliberate on a collective release of oil from emergency reserves, organised by the International Energy Agency, as reported by the Financial Times.
Three G7 nations, including the US, have so far voiced their endorsement for the proposal, the publication reported, citing sources. Furthermore, the ministers will engage in a call with IEA Executive Director Fatih Birol to address the ramifications of the conflict in Iran.
Crude oil prices skyrocketed over 25% on Monday, reaching their peak since the middle of 2022 due to significant suppliers reducing outputs and concerns of extended shipping interruptions seizing the market, prompted by the intensifying US-Israeli conflict with Iran.
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Oil reserves created during Arab oil embargo
Emergency oil reserves were formed as part of the IEA's establishment in 1974, a response to the Arab oil embargo that led to worldwide fuel shortages and significant price hikes.
Members of the IEA are obligated to maintain strategic reserves within a collaborative framework that aims to address serious interruptions in oil supply.
Five instances of oil reserve access
Since its inception, there have been five joint releases of emergency oil reserves by IEA member nations. The latest actions were taken in 2022 following Russia's invasion of Ukraine, which caused energy prices to soar.
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Total oil reserves
A confidential report referenced by the newspaper indicated that IEA member nations currently possess over 1.24 billion barrels in public strategic reserves, alongside approximately 600 million barrels held by the private sector that could also be activated if necessary.
Combined, these reserves could satisfy nearly one month of total oil consumption in IEA nations and more than 140 days of net imports, as stated in the document.
According to the Financial Times, the United States and Japan together hold about 700 million barrels out of the total 1.24 billion barrels of public strategic reserves.
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