United News of Bangladesh

The Group of Seven (G7) countries on Wednesday expressed support for a collective release of oil from strategic reserves to counter soaring global prices triggered by the US-Israel conflict with Iran. The G7, in coordination with the International Energy Agency (IEA), is reportedly preparing its largest-ever intervention in the oil market. The conflict has disrupted exports through the Strait of Hormuz, a key channel for one-fifth of the world’s oil supply, and has caused a sharp decline in regional production. Market reports indicate the IEA may release between 300 and 400 million barrels of oil — more than double the volume released after Russia’s invasion of Ukraine in 2022. Analysts, however, caution that this would cover only three to four days of global demand or roughly two weeks’ normal shipments through the Strait. Following a meeting with the IEA, G7 energy ministers said in a statement that they “support the implementation of proactive measures, including the use of strategic reserves” to stabilise markets. IEA member countries are required to maintain 90 days’ worth of national oil consumption in reserve for emergencies. Experts note that reserves are held across multiple locations, including terminals and refineries, and their release does not instantly increase supply. Instead, oil is gradually made available to refineries for distribution, while limited refining capacity may restrict immediate effects. Former BP strategy chief Nick Butler warned that releasing reserves is a one-time measure, adding, “Once you release them, they don’t exist.” Energy analysts describe the intervention as a short-term solution that may provide relief to markets strained by the conflict in the Middle East.   With inputs from BBC