Oil prices gave back part of their early gains on Monday after reports indicated that G7 nations could coordinate a release of strategic petroleum reserves to counter supply disruptions linked to the conflict involving Iran.
By 05:17 ET (09:17 GMT), Brent crude was trading at $106.58 per barrel, while West Texas Intermediate (WTI) futures stood at $103.78 per barrel.
Earlier in the session, Brent futures for May delivery had surged more than 30%, reaching a peak of $119.50 per barrel. Meanwhile, WTI futures climbed as much as 30% to an intraday high of $119.43 per barrel. Both benchmarks touched levels last seen in mid-2022.
G7 considers coordinated reserve release as Iran conflict intensifies
The Financial Times reported Monday that G7 finance ministers plan to discuss the possibility of jointly releasing emergency petroleum reserves during an urgent meeting scheduled for the same day.
According to the report, the release would be coordinated with the International Energy Agency, with at least three G7 members — including the United States — already backing the proposal.
Separately, Bloomberg reported that Saudi Arabian producers had begun offering crude on spot markets, an unusual move as the country attempts to offset potential supply shortages.
The war involving the U.S., Israel and Iran escalated over the weekend after airstrikes targeted Iranian oil facilities for the first time since the conflict began in early March. Monday marked the tenth consecutive day of fighting.
Iran was reportedly retaliating by launching attacks on oil infrastructure across neighboring Middle Eastern countries.
Tehran also began targeting vessels transiting the Strait of Hormuz, a critical shipping route responsible for roughly 20% of global oil consumption. Disruptions in the strait have been a major source of concern for energy markets, with the waterway now effectively blocked.
Since the conflict began, oil prices have jumped by more than 25%, pushing fuel costs sharply higher around the world.
“Tail risks from a sustained Hormuz stoppage remain in play, shifting the potential energy shock closer in scale to the 2022 Russia‐Ukraine episode,” OCBC analysts wrote in a note.
“In a moderately severe scenario – partial flows resuming under military escort – Brent could stay near USD100/bbl through mid‐year before cooling toward a well‐supplied 2026 equilibrium.”
Major Middle Eastern oil producers such as the United Arab Emirates and Kuwait have started cutting output as storage capacity tightens amid widespread supply disruptions.
Trump acknowledges short-term oil spike as gasoline prices climb
U.S. President Donald Trump acknowledged the recent surge in oil prices on Sunday evening, suggesting that crude could remain elevated in the near term.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump said in a social media post.
Last week Trump had downplayed concerns about rising gasoline prices in the United States related to the Iran conflict, telling Reuters that the military campaign against Tehran remained his top priority.
U.S. gasoline futures surged more than 10% on Monday, climbing well above $3.00 per gallon and approaching levels last recorded in mid-2022.
Oil markets were only marginally reassured by Trump’s earlier pledge to support maritime insurance coverage and potentially deploy naval protection for ships traveling through the Strait of Hormuz.