G7 finance ministers will hold an emergency meeting tonight to coordinate the release of strategic oil reserves to address the Middle East supply crisis

Financial Associated Press reports that, due to the Middle East conflict disrupting regional oil transportation, international oil prices continue to soar. G7 finance ministers are scheduled to discuss the possibility of jointly releasing emergency oil reserves on Monday.

According to sources familiar with the matter, the G7 finance ministers will hold a phone call at 8:30 a.m. New York time, and the action will be coordinated with the International Energy Agency. It is reported that three G7 members, including the United States, have expressed support for this strategy.

Historically, there have been only five instances of coordinated release of strategic oil reserves, two of which were to address market turmoil caused by the Russia-Ukraine conflict in 2022. Previously, this mechanism was activated during Hurricane Katrina, Libya supply disruptions, and the First Gulf War to respond to sudden supply crises.

With the Strait of Hormuz effectively blocked and exports from Persian Gulf oil-producing countries hindered, Brent crude oil prices surged to nearly $120 per barrel on Monday, a significant increase from about $72 before the conflict. Major oil producers, including the UAE and Iraq, have been forced to cut production due to insufficient storage capacity, while Saudi Arabia is urgently rerouting transportation routes to the Red Sea. Following news of the joint reserve release, oil prices’ gains have narrowed.

A source familiar with the matter said that some U.S. officials believe that releasing 300 to 400 million barrels (about 25% to 30% of the total reserve) from the current 1.2 billion barrels of strategic reserves would be a suitable plan.

The oil supply crisis triggered by the Middle East situation has had a tangible impact on global consumers. Long lines have appeared at many gas stations, and soaring aviation fuel prices have driven up ticket prices. Many Asian refineries dependent on Middle Eastern crude oil, unable to find alternative sources from the Persian Gulf, have been forced to reduce their operating rates.