G7 finance ministers dialed into an emergency conference call Monday morning with International Energy Agency chief Fatih Birol, putting a coordinated release of strategic petroleum reserves squarely on the table for the first time since the Hormuz crisis began.
Some US officials floated a release of 300 million to 400 million barrels, roughly a quarter of the 1.2 billion barrels held across the IEA's 32 member states. Three G7 nations, including the United States, have backed the idea. If approved, it would dwarf every previous coordinated drawdown, including the 2022 release that followed Russia's invasion of Ukraine.
White House reversal
The discussion marks a sharp pivot from just a week ago, when the White House said there was "no need to tap strategic reserves to stabilize oil prices." President Trump struck a similar note Saturday, telling reporters: "We've got a lot of oil. Our country has a tremendous amount. That'll get healed very quickly."
Markets read the G7 call differently. Oil blows past $100 as Hormuz blockade chokes global supply earlier Monday, with Brent briefly touching $119 before retreating to around $103 and WTI settling near $101 after the reserve-release headlines crossed wires. Intraday gains on both benchmarks narrowed by roughly five percentage points once traders priced in the possibility of fresh barrels hitting the market.
What the numbers look like
The US Strategic Petroleum Reserve held just over 415 million barrels at the end of February, up from about 395 million a year earlier but still well below the facility's 714-million-barrel capacity. Washington drained the reserve to a four-decade low of roughly 347 million barrels in mid-2023 and has spent nearly three years slowly buying it back.
A 300-to-400-million-barrel drawdown spread across IEA members would not fall on the US alone. Japan, Germany, South Korea, and other members maintain their own stockpiles, and the IEA counts an additional 600 million barrels in industry inventories that could be released under emergency protocols.
Side deals already in motion
While the G7 debates the big release, the Treasury Department has already moved on a smaller front. Washington granted India a 30-day waiver to purchase Russian crude oil and petroleum products through April 3, a measure Treasury Secretary Scott Bessent called "a deliberately short-term measure" to "alleviate pressure caused by Iran's attempt to take global energy hostage." India, whose refineries are heavily dependent on Gulf crude, has been scrambling for alternatives since the Hormuz blockade began.
Can reserves actually fix this?
Strategic stockpiles are designed to bridge short disruptions, not replace 20 million barrels a day of Hormuz transit for weeks on end. The IEA's total public reserves of 1.24 billion barrels sound large, but at the current rate of lost supply they would last roughly two months.
Rapidan Energy Group president Bob McNally, a former White House energy adviser, warned on CNBC last week that investors have gone "from complacency to the edge of panic" and that a prolonged Hormuz closure amounts to "a guaranteed global recession." A reserve release might slow the price rally, but the real variable remains whether the strait reopens to commercial traffic.
The IEA said it stands "ready to act to support the stability of oil markets." A formal decision from G7 leaders could come within days.