Oil Prices Breach US$120 as G7 Convenes Emergency Meeting on IEA Reserves

G7 member states have scheduled an emergency meeting for today, Monday 9 March, to respond to crude oil prices surging past the US$100 per barrel level. This action comes as global stock markets decline due to escalating conflict between the United States and Israel against Iran.

According to BBC reporting, finance ministers from developed industrial nations, including British Chancellor Rachel Reeves, will convene to discuss the economic impact of the conflict. Fears of prolonged disruptions to vital shipping routes through the Strait of Hormuz have driven crude oil prices near US$120 per barrel.

According to Financial Times reporting, the G7 meeting will also discuss the possibility of coordinated release of emergency oil reserves through the International Energy Agency (IEA). If realised, this would constitute the first collective action since Russia’s invasion of Ukraine in 2022.

The crisis is particularly concerning given that nearly one-fifth of global oil supply typically transits the Strait of Hormuz. However, traffic through this narrow passage has been reported as almost completely halted since conflict erupted more than a week ago. This situation threatens to accelerate global inflation and reduces the likelihood that central banks can cut interest rates in the near term.

Indonesia’s Finance Minister Purbaya Yudhi Sadewa has indicated there are currently no plans to raise subsidised fuel prices despite the surge in global crude prices. The government is prioritising economic stability and protecting public purchasing power.