The price of benchmark crude oil surged past $100 per barrel on Monday, reaching a level not seen since 2022, sparking fears of escalating gasoline prices and prompting an emergency meeting of G7 finance ministers. The surge follows heightened tensions stemming from the conflict between the United States and Israel against Iran, and disruptions to oil traffic through the critical Strait of Ormuz.
Asian stock markets reacted sharply to the news, with Japan’s Nikkei 225 index closing down by more than 5%. South Korea’s Kospi index experienced an even more dramatic drop, falling over 8% and triggering a 20-minute trading halt via a “circuit breaker” mechanism designed to prevent panic selling. The Kospi ultimately closed with a 6% decline.
G7 finance ministers convened a virtual emergency meeting led by France, which currently holds the rotating presidency of the group, to discuss the economic impact of the conflict and the rising oil prices. A key topic of discussion was the potential for a coordinated release of strategic petroleum reserves, held by the International Energy Agency (IEA) and its 32 member countries, to help stabilize the market.
According to sources familiar with the negotiations, the United States, along with at least two other G7 nations, has expressed support for a joint release. Reports suggest the group considered releasing 300 million barrels, which would represent a quarter of the collective emergency reserves and more than double the previous record intervention in April 2022, following Russia’s full-scale invasion of Ukraine.
Following the meeting, the IEA issued a statement confirming that the possibility of releasing reserves was discussed, but did not specify a quantity or confirm any definitive action. “We discussed all available options, including making emergency oil reserves available to the market,” said IEA Executive Director Fatih Birol. He added that global oil markets had “deteriorated in recent days” and that the conflict was “creating significant and growing risks to the market.” Birol similarly stated he was in close contact with energy ministers from Saudi Arabia, Brazil, India, Azerbaijan, and Singapore.
French Finance Minister Roland Lescure told reporters after the meeting that “we have not yet reached an agreement” on an emergency release of oil. “What was agreed is to use all the necessary tools, if necessary, to stabilize the market, including the possible release of the necessary stocks,” he said.
The disruption to energy supplies in the region poses a threat of increased prices for consumers and businesses worldwide. Approximately one-fifth of global oil supply typically transits through the Strait of Ormuz, but traffic through the narrow passage has largely ceased since the conflict began over a week ago.
Adnan Mazarei, an analyst at the Peterson Institute of International Economics, said the price increase was anticipated given the production disruptions in some Gulf countries and the prospect of a prolonged conflict. “People are realizing this isn’t going to end anytime soon,” he said, adding that objectives outlined by the U.S. Administration were “becoming increasingly unrealistic.”
U.S. President Donald Trump downplayed concerns about rising oil prices, stating on his Truth Social platform that short-term price increases, which he predicted would fall rapidly once the “destruction of the Iranian nuclear threat” is complete, were a “very little price to pay for the safety and peace of the U.S. And the world.”
Energy Secretary Chris Wright echoed this sentiment, telling U.S. News outlets that Israel, not the United States, was targeting Iranian energy infrastructure, amid concerns about rising gasoline prices in the U.S. Data from AAA showed the average U.S. Gasoline price rose 11% last week, reaching $3.32 per gallon.
The political landscape within Iran also underwent a significant shift on Sunday with the appointment of Mojtaba Khamenei to succeed his father, Ali Khamenei, as Supreme Leader. This move signals the continued dominance of hardliners within the country’s leadership following the assassination of the elder Khamenei at the start of the conflict. Unlike his father, Mojtaba Khamenei, 56, maintains a low public profile, having never held government office or given public speeches.
President Trump has indicated he will not accept the choice of Mojtaba Khamenei. Even as suggesting openness to a successor linked to the previous leadership, Trump has explicitly opposed Mojtaba Khamenei’s ascension. “The son of Khamenei is unacceptable to me,” he stated earlier this week.
The selection of Mojtaba Khamenei could prove contentious within Iran itself, as the Islamic Republic’s founding principles emphasize that the Supreme Leader should be chosen based on religious standing and proven leadership, rather than hereditary succession.
Over the weekend, the United States and Israel launched further aerial attacks on Iran, targeting several sites, including oil depots. Simultaneously, Iran retaliated by attacking energy infrastructure in neighboring Gulf countries. Saudi Arabia reported intercepting and destroying two waves of drones targeting a major oil field.
