Oil prices pulled back from earlier highs on Monday after reports suggested that G7 nations could coordinate a release of strategic petroleum reserves to ease supply pressures stemming from 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 were at $103.78 per barrel.
Earlier in the day, Brent futures for May delivery had surged more than 30% to reach $119.50 per barrel. WTI futures also climbed by as much as 30%, touching an intraday peak of $119.43 per barrel. Both benchmarks reached levels last seen in mid-2022.
G7 considers coordinated reserve release as Iran war intensifies
According to a report from the Financial Times, G7 finance ministers are set to discuss a potential coordinated release of emergency petroleum reserves during a crisis meeting scheduled for Monday.
The report said that the move would be carried out in coordination with the International Energy Agency, with three G7 members — including the United States — already expressing support for the plan.
In a separate development, Bloomberg reported that Saudi oil producers had begun offering crude on spot markets, an uncommon step aimed at filling a possible supply gap.
The war involving the U.S., Israel and Iran intensified over the weekend after airstrikes struck Iranian oil infrastructure for the first time since hostilities began in early March. Monday marked the tenth straight day of fighting.
Iran was reportedly responding by targeting oil infrastructure in neighboring Middle Eastern countries.
Tehran also launched attacks on vessels traveling through the Strait of Hormuz, a vital maritime route that carries around 20% of global oil consumption. Disruptions in the strait have been a central concern for energy markets, with the waterway now effectively closed to tanker traffic.
Since the conflict erupted, oil prices have surged more than 25%, pushing fuel costs higher across global markets.
“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 research 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 oil producers in the Middle East, including the United Arab Emirates and Kuwait, have begun curbing output as storage facilities fill up amid widespread supply disruptions.
Trump acknowledges near-term oil spike as gasoline prices rise
U.S. President Donald Trump acknowledged the recent jump in oil prices on Sunday evening, suggesting that crude could remain elevated in the short 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 wrote in a social media post.
Last week Trump dismissed concerns about rising gasoline prices in the United States linked to the Iran conflict, telling Reuters that the military campaign against Tehran was his top priority.
U.S. gasoline futures climbed more than 10% on Monday, rising well above $3.00 per gallon and approaching levels last recorded in mid-2022.
Oil markets were only modestly reassured by Trump’s earlier pledge to support maritime insurance coverage and potentially deploy naval protection for ships navigating the Strait of Hormuz.
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