G7 Finance Ministers Discuss Potential Use of Strategic Oil Reserves

During the G7 finance ministers' meeting on Monday, March 9, when France held the rotating chairmanship, it may decide to use strategic oil reserves to ease the surge in oil prices caused by the war in the Middle East.

The Financial Times was the first to report on the possibility of the G7 considering the use of strategic oil reserves and stated that the International Energy Agency (IEA) would join the discussion. The Financial Times cited sources saying that three G7 countries, including the United States, have so far expressed support for this idea.

The IEA has not yet commented on this. The agency said in a briefing earlier on Monday that it is closely monitoring energy security.

On Monday morning, French President Macron told reporters on his way to Cyprus, "Using strategic reserves is one of the options being considered."

He also said, "This week, G7 heads of state and government are considering coordinating on energy issues." The French Ministry of Economy and Finance stated that the finance ministers of the seven developed economies (the United States, Japan, Canada, the United Kingdom, France, Germany, and Italy) held a video conference at 1:30 p.m. (French time) (12:30 p.m. GMT) and the meeting was expected to last an hour.

French Finance Minister Roland Ries will give a speech in Brussels after the G7 finance ministers' meeting, followed by a meeting with other eurozone finance ministers.

Due to the war in the Middle East and the blockade of the Strait of Hormuz, oil prices surged more than 30% on Monday, approaching $120 per barrel, causing stock markets to crash and reigniting concerns about inflation shocks. After the announcement of the plan to use strategic reserves, the rise in oil prices eased somewhat.

EU: "No Shortage of Oil in the Near Future"

According to AFP, the International Energy Agency (IEA), established after the 1974 oil crisis, requires its approximately 30 member countries to maintain oil reserves equivalent to at least 90 days of net oil imports to cope with shocks such as long-term conflicts in the Middle East.

The French Ministry of Economy and Finance told AFP on Monday that France currently has oil reserves equivalent to 118 days of oil.

According to Nikkei News, as an IEA member, Japan has asked oil reserve holders to prepare for releasing reserves. It is estimated that Japan's oil reserves in December were about 400 million barrels, equivalent to 254 days of domestic consumption. The Japanese government said on Monday that no decision had been made yet.

In Brussels, the European Commission said on Monday that there is no risk of "shortage of oil supply in the near future" in Europe.

A spokesperson said, "All member states must maintain 90 days of emergency reserves. Member states must notify the European Commission when releasing these reserves. As far as we know, no member state has done so so far."

France, holding the rotating chairmanship of the G7 this year, announced last Wednesday that it would hold a G7 finance ministers and central bank governors' meeting. According to the French finance minister, in addition to exchanging information and listening to reports from the front lines, the meeting will also "assess the necessary measures to deal with the war in the Middle East."

The report analyzes that when the G7 holds its meeting on Monday, countries must overcome interest differences to reach an agreement. At the same time, countries such as Europe, Japan, and Canada are anxiously waiting for the U.S.'s still unclear intentions.

Asian countries have especially been hit by the surge in oil and gas prices.

Source: rfi

Original: toutiao.com/article/1859194985973836/

Disclaimer: This article represents the views of the author."