Germany’s finance ministry said on Monday that G7 finance ministers would meet later within the day to debate the impact of the war in Iran.
Oil prices spiked near US$120 per barrel before falling back Monday because the Iran war intensified, threatening production and shipping within the Middle East and pummeling financial markets.
The worth for a barrel of Brent crude, the international standard, surged to $119.50 per barrel early within the day but later was trading near $106 per barrel, up 14 per cent, before the opening bell.
West Texas Intermediate, the sunshine, sweet crude oil produced in the US, soared above $119.48 per barrel but fell back closer to $103.
The war’s toll on civilian targets grew as Bahrain accused Iran of striking a desalination plant vital to drinking water supplies.
Bahrain’s national oil company declared force majeure for its shipments after an Iranian attack set its refinery complex ablaze. The legal declaration releases the corporate of contractual obligations due to extraordinary circumstances.
Oil depots in Tehran smoldered following overnight strikes by Israel.
Oil prices have surged because the war, now in its second week, ensnares countries and places which can be critical to the production and movement of oil and gas from the Persian Gulf.
Prices moderated after the Financial Times reported that some members of the Group of Seven industrial nations were considering releases of strategic oil reserves to alleviate pressure on the markets.
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French President Emmanuel Macron said Monday that “the usage of strategic reserves is an envisaged option.” He said G7 leaders could meet this week to coordinate a response to climbing energy prices.
France currently holds the rotating presidency of the G7 group. Individually, finance ministers from the G7 nations are meeting Monday by video conference to debate the repercussions from the war.
On Saturday, U.S. President Donald Trump downplayed the concept of turning to America’s Strategic Petroleum Reserve, saying U.S. supplies were ample and costs would soon fall.
Roughly 15 million barrels of crude oil — about 20 per cent of the world’s oil — typically are shipped each day through the Strait of Hormuz, in response to independent research firm Rystad Energy. The specter of Iranian missile and drone attacks has all but stopped tankers carrying oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran from travelling through the strait, which is bordered within the north by Iran.
Iraq, Kuwait and the UAE have cut oil production as storage tanks fill as a consequence of the reduced ability to export crude. Iran, Israel and the US even have attacked oil and gas facilities because the war began, worsening supply concerns.
The surge in costs for oil and natural gas is pushing fuel prices higher, cascading through other industries and jolting Asian economies which can be especially vulnerable as a consequence of the region’s heavy reliance on imports from the Middle East.
Iran exports roughly 1.6 million barrels of oil a day, mostly to China, which has called for an instantaneous end to the fighting. Beijing might have to look elsewhere for supply if Iran’s exports are disrupted, one other factor that would increase energy prices.
“All parties have their responsibility to make sure stable and smooth energy supplies,” Chinese Foreign Ministry spokesman Guo Jiakun said in a briefing Monday.
“China will take mandatory measures to safeguard its own energy security.”
South Korean President Lee Jae Myung warned Monday of strict penalties for refiners and gas stations caught hoarding or colluding on prices, saying it might be sensible to search out alternatives to supplies that must travel through the Strait of Hormuz.
Across Southeast Asia, the spike in prices has led to long lines outside filling stations.
“Higher oil and gas prices will affect everyone and our economy,” said Le Van Tu, who was waiting outside a gas station within the Vietnamese capital Hanoi.
“All activities, including those using petrol based transportation can be affected.”
South Korea’s Kospi tumbled six per cent to five,251.87.
The last time Brent and U.S. crude futures traded near the present level was in 2022, after Russia invaded Ukraine.
Higher energy costs push inflation higher, straining household budgets and denting the patron spending that may be a most important driver of many big economies. Those worries have spilled into financial markets, pulling share prices sharply lower.
In Canada, the national gas price as of early Monday sits at C$1.54 as of publication, and up from about $1.32 per week earlier, in response to CAA.
Within the U.S., the typical price of a gallon of standard gasoline rose to US$3.48 as of early Monday, up nearly 50 cents from per week earlier, in response to AAA motor club.
Diesel, used heavily in shipping, sold for about $4.66 a gallon, a weekly increase of greater than 80 cents.
The worth of natural gas within the U.S. also has climbed through the war, though not by as much as oil. It was selling for about $3.34 per 1,000 cubic feet early Monday. That’s up from Friday’s closing price of $3.19.
– With files from Reuters and Global’s Ariel Rabinovitch
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