G7 weighs release of strategic oil reserves as IEA signals no immediate action
G7 finance ministers are expected to discuss a possible coordinated release of strategic oil reserves as the war in the Middle East rattles energy markets, a French government source said today. The International Energy Agency, which coordinates emergency actions among major importers, said there is “plenty of oil in the market” and no collective action is planned for now, even as it keeps “all options” open.
- Advertisement -
The debate comes as U.S. benchmark West Texas Intermediate crude spiked past $100 and then $110 a barrel on Monday before paring gains, highlighting the market’s sensitivity to geopolitical risk. Many countries—especially members of the IEA—hold strategic petroleum reserves to cushion economic shocks, stabilize supplies and, in wartime, to support essential transport and critical industries.
Set up in 1974 after the first oil shock, the IEA’s mission is to safeguard the security of global energy supply. Its roughly 30 members, including the United States, Japan, Germany, France and others, must hold emergency oil stocks equal to at least 90 days of net imports. Those inventories can be crude oil or refined fuels and include both government-owned reserves and commercial stocks that authorities can compel companies to maintain.
Any coordinated drawdown requires IEA agreement after assessing the scale of disruption and market conditions. The agency has acted five times: before the 1991 Gulf War, after Hurricanes Katrina and Rita in 2005, during Libya’s civil war in 2011, and twice in 2022 following Russia’s invasion of Ukraine.
Despite heightened tension, the IEA points to ample buffers. It says the global oil market has been in surplus since the start of 2025, and total stocks last year exceeded 8.2 billion barrels—providing what it called a “significant safety cushion against potential disruptions.” IEA members hold more than 1.2 billion barrels in public emergency reserves, plus around 600 million barrels in additional industry inventories mandated by governments. The world consumes roughly 100 million barrels of oil a day.
France has sought to calm domestic concerns, saying it does not foresee shortages and estimates its stockpile at about 118 days of net imports. In Asia—more exposed to Middle Eastern supplies—authorities are signaling readiness. In Japan, the Nikkei reported that officials asked stockholders, who held around 400 million barrels in December (approximately 254 days of domestic consumption), to prepare for potential releases; Tokyo said today no decision has been made.
China, a major consumer of Middle Eastern crude, asked key refiners in early March to suspend diesel and gasoline exports, according to Bloomberg. Over recent years China has built significant crude reserves, estimated at roughly 1.2 billion barrels by analytics firm Kpler—about 115 days of its seaborne oil imports. India, another large importer, has secured a U.S. waiver allowing it to buy 30 days’ worth of Russian oil that would otherwise be restricted by international sanctions.
Even as policymakers weigh options, the IEA’s message aims to ease market anxiety. “There is plenty of oil in the market,” Executive Director Fatih Birol said Friday, adding there is “no collective action” planned at present, though the agency is keeping “all options” under consideration. The G7 discussion underscores the value of emergency reserves as a backstop—and the delicate balance officials are trying to strike between reassuring markets and preserving response capacity should disruptions worsen.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
