Oil is confirmed within the ceiling of 90 dollars per barrel on international markets, after several G7 countries and the International Energy Agency (IEA) have opened up the possibility of releasing strategic reserves to cover the supply deficit from the Gulf, estimated at around 15 million barrels per day, created by the blockade of the Strait of Hormuz.
Thus, Brent trades at around 90 dollars, after having reached a minimum of 87 dollars this morning, while US WTI trades around 86 dollars a barrel, compared to a minimum of 83 USD. Prices are far from the peaks of 119-120 dollars reached by the two types of crude oil in recent days.
The release of IEA reservations
The news that the International Energy Agency (IEA) announced the largest release of strategic reserves in its history, even higher than the 182 million barrels released in 2022 following the Ukraine-Russia conflict, cooled the prices.
“The 32 member countries of the International Energy Agency – announced the statement – today unanimously agreed to make 400 million barrels of oil from their emergency reserves available to the market to address the disruptions in the oil markets caused by the war in the Middle East”.
According to IEA data, global strategic reserves amount to 8.2 billion barrels, of which IEA members hold approximately 1.2 billion, to which approximately 600 million in private deposits must be added. The use of strategic reserves, usually coordinated by the International Energy Agency, remains an extreme measure adopted only five times in history, including two responses to Russia’s invasion of Ukraine in 2022.
THE G7 emergency meetings
The G7 countries met on an emergency basis in recent days, to evaluate the release of strategic reserves. According to the FT, there would be talk of the release of around 300-400 million barrels of reserves.
After an initial decision-making stalemate among the G7 Energy Ministers, some countries moved in no particular order. A new “remote” meeting is scheduled for this evening.”
An overture came from Brussels, where EU Economy Commissioner Valdis Dombrovskis said eurozone finance chiefs would discuss the release option to “provide more supply during this disruption.”
Japan ahead with stand-alone solution
Japanese Prime Minister Sanae Takaichi said Japan would release its oil reserves as early as next Monday as part of an independent initiative, rather than as part of a coordinated international effort. The release was anticipated by Japanese Economy Minister Ryosei Akazawa in Parliament: “We will not exclude any options and will take all possible measures to ensure the stability of energy supplies”
Germany in favor of releasing reserves within the IEA
Germany, which holds around 2.4 million tonnes of reserves, has confirmed that it plans to release part of its national oil reserves if the International Energy Agency’s proposal to release up to 400 million of reserves is accepted. Economy Minister Katherina Reiche stated this to the press, citing the IEA.
