Multiple Countries Consider Tapping Oil Reserves, Crude Oil Prices Plummet

On the afternoon of March 11, international oil prices experienced significant fluctuations. WTI crude oil surged over 6% at one point before plummeting sharply. As of 19:20, WTI crude oil’s gains had narrowed to 2.41%, and Brent crude rose by 2.38%.

According to CCTV News, on the evening of the 11th, Japanese Prime Minister Fumio Kishida stated that due to escalating tensions in Iran, the Japanese government plans to release the country’s oil reserves as early as the 16th of this month.

Xinhua News Agency reports that, influenced by the Middle East situation, international oil prices have been rising steadily. Several countries and international organizations are beginning to discuss preparedness measures, with releasing oil reserves becoming a key option.

Due to disruptions in shipping through the Strait of Hormuz, a major oil transit route in the Middle East, leading oil-producing countries have been forced to cut production. ING analysts pointed out that even if shipping through the Strait of Hormuz resumes, it will take time for upstream oil production to recover. With no signs of easing in the conflict, oil supply may face long-term risks.

Later on the evening of the 10th, the International Energy Agency (IEA) held a special meeting of member countries, proposing to release the largest-ever stockpile of oil reserves to address current supply tightness. Media reports previously indicated that some U.S. officials suggested jointly releasing 300 to 400 million barrels of oil, accounting for about 25% to 30% of IEA member countries’ oil reserves.

On the 10th, energy ministers from G7 countries held a meeting to discuss the global oil and gas market situation. No decision was made at this time regarding the release of IEA member countries’ oil reserves. Later, French President Emmanuel Macron will host a virtual G7 leaders’ summit to discuss energy issues.

French Economy and Finance Minister Bruno Le Maire stated that governments are “ready to take measures to stabilize the market if necessary,” including utilizing oil reserves. Leaders of economic and financial departments from Japan, the UK, and other countries expressed support for the IEA’s coordinated release of oil reserves.

According to IEA regulations, net oil importing member countries must maintain at least 90 days of oil import reserves. These reserves are stored in government facilities, commercial storage sites, and industrial inventories.

Several European countries announced measures on the 9th to address fuel market volatility. Hungarian Prime Minister Viktor Orbán announced that the country would use national oil reserves to ensure supply stability and implement price caps on retail gasoline and diesel to protect households, businesses, and farmers. The Serbian government held a special meeting on the 9th, announcing a suspension of crude oil and fuel exports to ensure domestic market supply.

EU Commission spokesperson Anna-Kaisa Itkonen stated on the 9th that the EU is closely monitoring energy prices. She said that the oil reserves or equivalent energy reserves of EU member states could meet about 90 days of demand.

Xinhua News Agency reports that U.S. President Donald Trump on the 7th said he has no intention of using strategic petroleum reserves to stabilize oil prices. An article in the Financial Times pointed out that in 2021, the U.S. released large amounts of strategic oil reserves to lower prices, but subsequent replenishment was delayed, leaving the U.S. strategic reserves at low levels. The Trump administration’s ability to respond to the current energy market shocks is limited.

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