G7 energy and financial officials said on Monday that they are carefully monitoring the impact of the Iran war on energy and commodity markets, inflation, as well as overall economic stability, and are willing to take “any necessary measures” to ensure the security and stability of energy markets, according to a statement published on Monday.
ADVERTISING
ADVERTISING
“We are ready to take all the necessary measures in close cooperation with our partners, including maintaining the stability and security of the energy market. We recognize the importance of coordinated international measures to reduce spillovers and protect macroeconomic stability”, the statement reads.
Although the G7 leaders did not agree on any concrete step – such as the new release of oil reserves – today’s talks will pave the way for a review of European energy ministers on Tuesday.
Ministers will review energy security and supply conditions across the EU as the bloc braces for an oil crisis that, according to Fatih Birol, head of the International Energy Agency, is reminiscent of the 1970s.
The IEA has coordinated the release of 400 million barrels of oil on March 11 to reduce the shortage caused by the closure of Hormuz, after the attacks by the US and Israel against Iran, but it proved insufficient to deal with rising oil prices. EU oil and gas technical experts have been meeting regularly to assess the seriousness of the situation.
The European Commission confirms that the bloc faces price fluctuations. But Tuesday’s meeting with energy ministers aims to assess current storage facilities at a time of uncertainty, as LNG tankers en route to Europe have been diverted to Asia amid higher prices.
The sudden drop in oil and natural gas prices sent markets pushing Brent crude to $119 a barrel, from $70 before the war. Analysts say oil prices could rise to $200 amid unexpected conflict conditions.
As for natural gas, analysts predict that prices could rise to crisis levels in 2022, when the bloc lost 44% to 45% of its imports from Russia, following Moscow’s attack on Ukraine. The virtual meeting came a day before EU energy ministers are due to discuss security of supply.
The G7 countries are increasing the number of urgent meetings amid efforts to deal with the global economic consequences of the war in Iran, which has just entered its second month.
Signs of inflation and rising borrowing costs now make it hard to ignore the G7 crisis. With oil and gas prices already on the rise, there are fears that the protracted conflict could upend global supply chains as vital resources, including fertiliser, are trapped in the Strait of Hormuz, a critical waterway that has been effectively closed since the war began.
US President Donald Trump announced on Monday that there was “substantial progress” in talks with Tehran. However, he threatened an attack on Iran’s power plants, oil facilities, and potential salt plants if a deal is not “reached soon” – actions that could exacerbate speculation in world markets.
Meanwhile, the Group of Seven agreed to protect the Strait but only after the war between the United States, Israel and Iran ended.
On Monday, the European Commissioner for Energy Dan Jørgensen called for targeted measures that should be in line with the long-term strategy, including reducing imports of fossil fuels, boosting the production of renewable energy, and creating an energy union, he said in X.
Jørgensen said the bloc “must double down on our path to energy independence” by improving its grid infrastructure – an important factor in improving the flow of renewable electricity and avoiding grid congestion and slowdowns.
The Danish commissioner urged MEPs on March 25 to support a “quick and determined agreement (Grids Package)”, to speed up the construction of “much needed” infrastructure and connections.
In the meantime, some European countries have started to take national measures to deal with this crisis.
Poland will introduce a fuel price hike from Tuesday, Energy Minister Miłosz Motyka announced on Monday. This follows similar measures by Hungary and Croatia, which introduced their price tags in early March.
Mared Gwyn Jones contributed to this report
#pledges #measures #protect #energy #market