I=7
Oil futures rise more than 10% as Iran conflict continues and despite reports that G7 members are considering tapping on oil reserves
- West Texas Intermediate is up 13% while Brent futures is up 14.8% as signs for an end in Iran conflict appear limited and despite G7 planning to tap on oil strategic reserves.
- The Financial Times reported yesterday that the G7 members, including the U.S. will hold a meeting on today to consider tapping on oil strategic reserves and co-ordinated by the International Energy Agency (IEA).
- A person familiar with the matter said the U.S. considers a joint release in the range of 300mn-400mn barrels- 25 to 30% of the 1.2bn barrels in the reserve to be appropriate.
- The stock-biles under IEA could cover nearly one month of total oil demand in IEA countries and over 140 days of net imports.
- This comes after Iraq, Kuwait and the United Arab Emirates cut oil production due to lack of storage space as they are unable to export through the Strait of Hormuz (which accounts for 20% of world’s oil consumption) .
