G7, IEA reportedly considering joint release of emergency Oil reserves

As a significant share of global crude flows is at risk, the International Energy Agency (IEA) is reportedly discussing a coordinated release of emergency oil reserves among G7 member countries to stabilize markets. Such actions are typically deployed when major supply disruptions threaten global energy security.

The release of emergency oil reserves by countries coordinated through the IEA can add temporary supply to the market and prevent a sharp spike in oil prices.

Qatar’s Energy Minister Saad al-Kaabi said that the country expects all Gulf energy producers to shut down exports within weeks and drive oil to $150 a barrel, the Financial Times reported on Friday. 

Meanwhile, the United Arab Emirates (UAE) and Kuwait started reducing oil production, as the closure of the Strait of Hormuz ripples through energy markets and affects global supply. Additionally, Saudi Arabia’s Defense Ministry stated that state-controlled Saudi Aramco’s Ras Tanura loading terminal and refinery complex was targeted by an Iranian drone on Wednesday. A wider conflict in the Middle East and a cut in crude oil output boost the WTI price above $100 per barrel, the first time in four years. 

Market reaction

At the time of writing, the West Texas Intermediate (WTI) is up 14.00% on the day at $100.92, reversing sharply from over three-year highs of $113.28 reached earlier in the Asian session.