Oil Price Surge Eases Slightly on G7 Coordination, Closes at $98

[Financial News]

International oil prices on the 9th (local time) ended regular trading below $100 per barrel. After nearly touching $120 in overnight electronic trading, prices managed to pare back some of their gains on expectations of coordinated action by the Group of Seven (G7).
However, unless the blockade of the Strait of Hormuz is lifted, where 20% of the world’s oil and natural gas consumption passes through, there are growing fears that the price spike will not subside and that the world will ultimately enter an era of $150 oil.
At the close, benchmark Brent Crude Oil for May delivery surged $6.01, or 6.48%, from the previous session to settle at $98.70 per barrel.
West Texas Intermediate crude oil (WTI), the benchmark for U.S. oil prices, also jumped $3.87, or 4.26%, with April futures closing at $94.77 per barrel.
Earlier in electronic trading, Brent had spiked to as high as $119.50 per barrel, while WTI climbed to $119.48.
It was the first time since the Russian Federation’s invasion of Ukraine in 2022 that Brent Crude Oil had broken above $100 a barrel.
On this day, G7 finance ministers held a virtual meeting to discuss a release from the strategic petroleum reserve (SPR) but failed to reach a conclusion. Instead, they agreed that G7 energy ministers would decide on a release in a virtual meeting on the 10th.
In a statement, the G7 finance ministers said they "stand ready to take necessary action, including measures to support global energy supplies such as a release of reserves."
According to Consumer News and Business Channel (CNBC), G7 energy ministers will further discuss a release from the SPR in their virtual meeting on the 10th. The size of the release is to be announced after the meeting.
The United States expects the volume to be in the range of $300 million to $400 million, or about 25–30% of the G7’s total reserves of 1.2 billion barrels.
The U.S. SPR has not yet been refilled after a large-scale release during the previous administration of Joe Biden to stabilize prices. It is reported to stand at about 415 million barrels, roughly 58% of storage capacity.
President Donald Trump, however, after taking office in January last year, had promised to immediately replenish the SPR but failed to do so even during a period of low oil prices, sowing the seeds of today’s problems.
Wall Street experts, including Goldman Sachs and Ed Yardeni, founder of Yardeni Research, warn that if the blockade of the Strait of Hormuz is not lifted, international oil prices could soon break above $150.
There is also mounting concern that if high oil prices persist, the U.S. economy could fall into stagflation, with inflation surging while growth retreats.
Donald Trump, however, appears largely unconcerned about the spike in oil prices.
When international oil prices broke above $100 per barrel overnight, he posted on his social media platform Truth Social, characterizing it as a "short-term rise in oil prices." He was dismissing the prospect of a prolonged increase that experts fear.
He also argued that this was "a very small price to pay" for destroying the Islamic Republic of Iran’s nuclear threat. Trump added, "Only a fool would see it differently."
By contrast, a spokesperson for the Ministry of Foreign Affairs of the Islamic Republic of Iran on the 9th reaffirmed its intention to keep the Strait of Hormuz closed, warning that oil tankers "must be extremely cautious."

dympna@fnnews.com Song Kyung-jae Reporter