G7 nations have said they would support the collective release of oil from their reserves to tackle soaring prices since the start of the US-Israel war with Iran.<\/p>\n
The group of countries has been meeting with the International Energy Agency (IEA), which has asked member states to make their biggest-ever intervention in the oil market.<\/p>\n
The conflict has caused oil exports through the Strait of Hormuz \u2014 which carries a fifth of global oil supplies \u2014 to virtually stop and production in the region to slump.<\/p>\n
Prices have jumped since the conflict started but stabilised following reports that oil could be released, though experts say the move would only be a short-term solution.<\/p>\n
The IEA has asked its 32 members to release 400 million barrels of oil, more than double the amount it released following Russia\u2019s full-scale invasion of Ukraine in early 2022, according to Germany\u2019s economy minister Katherina Reiche.<\/p>\n
All 32 members would need to agree to a release for it to go ahead.<\/p>\n
Reiche said Germany will \u201ccomply with [the IEA\u2019s request] and contribute to it, as Germany stands behind the IEA\u2019s most important principle of mutual solidarity\u201d.<\/p>\n
Earlier on Wednesday, Austria and Japan confirmed they will also release oil from their stockpiles.<\/p>\n
According to reports, the IEA will confirm a release of 400 million barrels from its members\u2019 reserves on Wednesday afternoon.<\/p>\n
However, that would only amount to around three or four days\u2019 worth of global supply or roughly a fortnight\u2019s worth of what would normally be shipped out of the Strait of Hormuz.<\/p>\n
Following a meeting with the IEA on Wednesday, G7 energy ministers said: \u201cIn principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves.\u201d<\/p>\n
The IEA\u2019s member and associate countries represent two thirds of global energy production and 80% of consumption.<\/p>\n
All IEA member countries are required to keep 90 days\u2019 worth of their nation\u2019s oil use in reserve in case of global disruption.<\/p>\n
The oil itself is not in a single place. For example, producers like Shell and BP keep stocks at terminals and refineries around the UK and can earmark stocks held elsewhere as counting towards their reserves.<\/p>\n
When it is released, it does not mean a sudden flood of new oil starts moving.<\/p>\n
Instead, producers will make more available in the market for refineries to order, though energy analysts have told the BBC that there is a shortage of refining capacity.<\/p>\n
The other issue with releasing reserves is that it is not something you can do again.<\/p>\n
\u201cOnce you release them, they don\u2019t exist,\u201d Nick Butler, former head of strategy at BP, told the BBC.<\/p>","protected":false},"excerpt":{"rendered":"
G7 nations have said they would support the collective release of oil from their reserves to tackle soaring prices since the start of the US-Israel war with Iran. The group of countries has been meeting with the International Energy Agency (IEA), which has asked member states to make their biggest-ever intervention in the oil market. […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-133902","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/133902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/comments?post=133902"}],"version-history":[{"count":0,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/133902\/revisions"}],"wp:attachment":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/media?parent=133902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/categories?post=133902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/tags?post=133902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}