G7 Weighs Emergency Oil Reserve Release as Iran-Israel Conflict Pushes Brent Crude Above $100

Global energy markets have been thrown into turmoil after crude oil prices surged past $100 a barrel following escalating tensions linked to the Iran-Israel conflict escalation 2026. Finance ministers from the Group of Seven (G7) are now preparing to discuss a coordinated release of emergency oil reserves in an effort to stabilise markets and ease fears of supply disruptions.

G7 Plans Emergency Oil Reserve Talks

According to a report by the Financial Times, G7 finance ministers are expected to hold a call organised by the International Energy Agency (IEA) at 8:30am New York time to discuss possible market interventions.

Sources familiar with the preparations said at least three G7 members, including the United States, have already supported the idea of tapping emergency oil reserves to address the sharp rise in energy prices.

US officials reportedly believe that releasing between 300 million and 400 million barrels from strategic reserves could help stabilise markets. The proposed amount would represent roughly 25% to 35% of the 1.2 billion barrels stored within the IEA's emergency reserve system maintained by its 32 member countries.

Origins of the IEA Emergency Reserve System

The IEA's emergency oil stockpile system was established in 1974 following the 1973 Oil Crisis, when the Arab oil embargo triggered severe fuel shortages and price spikes across Western economies. Since then, the agency has coordinated five collective releases of emergency reserves, including two recent drawdowns after the Russian invasion of Ukraine in 2022 disrupted global energy supplies.

Brent Crude Oil Prices Surge Amid Supply Fears

Oil markets reacted sharply to the conflict and concerns over supply disruptions. The global benchmark Brent Crude jumped as much as 29% to $119.50 per barrel during early trading on Monday, marking its highest level in four years. Prices later eased to around $106.73, though they remained roughly 15% higher on the day.

Energy Infrastructure and Supply Risks

The conflict has already impacted energy infrastructure in the region. At least five energy facilities near Tehran were reportedly struck during the recent escalation. Meanwhile, Kuwait's national oil company announced a precautionary reduction in production.

The situation has also raised alarm over the Strait of Hormuz-a critical shipping route through which around one-fifth of global oil and seaborne gas supplies pass. The passage has effectively remained closed for about a week, increasing fears of prolonged supply disruptions.

Officials from the European Union confirmed that the bloc's oil and gas supply coordination groups will meet later this week to evaluate the potential impact of the conflict on regional energy flows. Under EU rules, member states must maintain emergency oil reserves equal to at least 90 days of consumption.

US President Donald Trump said the increase in crude oil prices was "a very small price to pay" for global security and peace, describing the spike as a short-term consequence of the conflict.

Meanwhile, Iranian officials warned that continued attacks on energy infrastructure could push prices significantly higher. A spokesperson for the Islamic Revolutionary Guard Corps cautioned that oil prices could climb above $200 per barrel if the conflict escalates further.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.