G7 finance ministers convened an emergency meeting on Monday to discuss a coordinated response to surging oil prices triggered by the escalating conflict in the Middle East, with discussions centering on the potential release of strategic crude reserves. The move comes after oil prices jumped as high as $120 a barrel, fueled by fears of prolonged disruption to fuel supplies, before partially retracting to around $99 a barrel following comments from former U.S. President Donald Trump.
UK Chancellor Rachel Reeves, participating in the G7 call, cautioned that the conflict in Iran would likely “put upward pressure on inflation in the coming months,” and warned fuel retailers against exploiting the crisis to generate “excess profits.” Reeves also informed Parliament that she has requested the Competition and Markets Authority to closely monitor pricing, particularly for essential fuels like petrol, diesel, and heating oil. “I will not tolerate any company exploiting the current crisis to make excess profits at consumers’ expense,” she stated.
Whereas G7 nations acknowledged the need to support global energy supplies, a consensus on immediately releasing strategic reserves remained elusive. French Finance Minister Roland Lescure indicated that the group was “not there yet” regarding a release, despite the International Energy Agency (IEA) highlighting significant risks to oil markets due to both production curtailments and potential transit challenges through the Strait of Hormuz. The IEA noted that member countries hold over 1.2 billion barrels of public emergency oil stocks, supplemented by 600 million barrels held by industry under government obligations.
The initial price spike followed airstrikes against Iranian oil refineries, raising concerns about a substantial and sustained disruption to oil production. The surge represented the largest one-day increase since the onset of the COVID-19 pandemic. However, the market reacted to Trump’s suggestion that the war was “complete,” and subsequently to his lack of further clarification at a press conference, resulting in fluctuating prices.
Despite the volatility, Reeves reassured households that the UK energy price cap is still expected to fall in April, as previously planned. The G7 finance ministers collectively affirmed their readiness to “grab necessary measures” to stabilize energy markets, but stopped short of a firm commitment to release reserves. The meeting included participation from heads of the International Monetary Fund (IMF), World Bank Group (WBG), Organisation for Economic Co-operation and Development (OECD), and the IEA.
The possibility of releasing oil reserves would mark the first such action since 2022, following Russia’s invasion of Ukraine. The G7 statement emphasized the importance of secure trading routes and regional stability, but did not detail specific actions beyond a willingness to intervene if necessary. Chancellor Reeves reiterated the UK’s call for “immediate de-escalation” in the Middle East and guaranteed security for shipping in the region.
