The Group of Seven (G7) nations on Wednesday indicated support for a coordinated release of oil from strategic reserves in an effort to calm global markets after prices surged amid the ongoing US-Israel conflict with Iran.
The proposed move is being discussed in coordination with the International Energy Agency (IEA), which is reportedly considering its largest intervention ever in the global oil market. Disruptions to exports through the Strait of Hormuz - a vital route that carries roughly one-fifth of the world’s oil supply - have sharply tightened supply and pushed prices higher.
According to market analysts, the IEA could release between 300 million and 400 million barrels of oil from emergency stockpiles. This would be significantly larger than the coordinated reserve release carried out following Russia’s invasion of Ukraine in 2022. Even so, experts note that such a volume would meet only three to four days of global oil demand or roughly two weeks of typical shipments passing through the Strait of Hormuz.
Following discussions with the IEA, G7 energy ministers said they support “proactive measures,” including the possible deployment of strategic oil reserves, to help stabilise energy markets during the crisis.
IEA member states are required to maintain emergency reserves equivalent to at least 90 days of domestic oil consumption. These stockpiles are stored across various facilities such as refineries, storage terminals and depots.
Energy experts caution that releasing reserves does not immediately flood the market with crude oil. Instead, supplies are gradually distributed to refineries, and limited refining capacity may slow the speed at which the oil reaches consumers.
Nick Butler, former head of strategy at BP, warned that strategic reserves can provide only temporary relief.
“Once these reserves are used, they are gone,” he said, describing the measure as a short-term tool to ease pressure on markets affected by geopolitical tensions in the Middle East.
