Crude oil futures pared sharp gains during Monday’s session, March 9, after reports emerged that G7 finance ministers may discuss a coordinated release of oil from strategic petroleum reserves to stabilize global markets.
On the Multi Commodity Exchange of India (MCX), crude oil futures had earlier surged nearly 24% intraday, touching levels above Rs 10,300 per barrel amid escalating geopolitical tensions in the Middle East. However, prices later pulled back sharply, falling around 6% from the day’s peak after the reports surfaced.
At around 11:06 AM, MCX crude futures were trading near Rs 9,885 per barrel, still up 18.20% or Rs 1,522 for the day.
G7 emergency reserve release under discussion
According to a report by the Financial Times, G7 finance ministers are expected to discuss a coordinated release of oil from emergency petroleum reserves during a meeting scheduled this week.
The potential move would involve releasing crude from strategic reserves maintained by major economies including:
- United States
- Japan
- Germany
- France
- United Kingdom
- Italy
- Canada
The release could be coordinated through the **International Energy Agency (IEA), which has previously organized similar actions during major supply disruptions.
Market participants believe that a large-scale release could temporarily boost supply and help calm energy markets that have been shaken by the ongoing geopolitical crisis.
Supply disruptions driving crude surge
Crude oil prices had earlier surged sharply as the conflict involving Iran, Israel and the United States intensified across the Middle East.
One of the biggest concerns for markets is the Strait of Hormuz, a critical shipping corridor through which roughly 20% of the world’s oil supply passes.
Disruptions to tanker traffic, attacks on energy infrastructure and rising shipping risks have triggered fears of significant supply shortages.
Global oil benchmarks have reacted strongly to these developments, with Brent crude climbing above $115 per barrel and registering one of the sharpest rallies seen in years.
Strategic reserves used during past oil shocks
A coordinated release of strategic oil reserves has been used several times in the past to stabilize markets during major crises.
Examples include:
- 1991 Gulf War, when reserves were released to offset supply disruptions
- 2005 Hurricane Katrina, which damaged US refining infrastructure
- 2011 Libya conflict, when oil exports from Libya were disrupted
- 2022 Russia–Ukraine war, when the IEA coordinated a massive reserve release
Such actions aim to inject additional supply into the market and prevent extreme price spikes that could trigger inflation or economic instability.
Volatility likely to remain high
Despite the pullback from day’s highs, oil prices remain elevated due to ongoing geopolitical risks and uncertainty around global supply flows.
Markets are expected to remain highly volatile as traders closely watch diplomatic developments, potential supply responses and decisions by major economies on strategic petroleum reserves.
Any confirmed release from strategic reserves could temporarily ease prices, while further escalation in the Middle East could push oil prices higher again.
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